DAI is a beneficial stablecoin pegged to the U.S. dollar, decreasing volatility and allowing several DeFi capabilities such as lending, borrowing, or trading.
Dai (DAI) is a stablecoin connected to the price of the U.S. dollar. DAI’s price is regulated by MakerDAO (decentralized governance network) to maintain its fee stability. While real DAI stablecoins are produced thru its Maker Protocol platform that accepts several cryptocurrencies as collateral, DAI also can be bought directly using fiat cash (like the U.S. dollar) on most regulated crypto exchanges.
DAI can be bought outright on both centralized cryptocurrency exchanges or DEXs. Using the Maker Protocol, you can additionally borrow DAI by depositing Ethereum-based belongings as collateral to underwrite the amounts of DAI borrowed. DAI requires a bigger collateral deposit than the amounts of DAI borrowed to ensure community liquidity. If the fee of your crypto-collateral drops beneath the price of the issued DAI tokens, the collateral can be forfeited. However, if your collateral increase in cost, your DAI borrowing limit will increase proportionately. The Maker Protocol operates in addition to an escrow account that holds collateral until the borrowed DAI and processing money are back.
Every other benefit specific to DAI is now broadly included within the Ethereum blockchain. Once bought or borrowed, it can use in hundreds of decentralized apps consisting of:
Here are some different functions worth thinking about.