Digital Currency Dai (DAI) is a decentralized stablecoin. Currently, stablecoin Dai is the best alternative to centralized stablecoins like Tether. DAI cryptocurrency is an Ethereum-based token (ERC-20 token). Cryptocurrency is created as a stablecoin based on the US dollar and its value is defined as a 1:1 ratio to the US dollar; That is, the value of Dai’s stablecoin is almost equal to one US dollar, making Dai’s project and MakerDAO ecosystem one of the most important cryptocurrency projects. The value of the Dai digital currency is controlled by the maker company in a decentralized manner, thereby maintaining its price stability. These are just some of the unique features that make Project Dai the most important stablecoin in the crypto market. Stay tuned to Digital Currency Signal for our full review of DAI.
What is Dai digital currency?
The DAI cryptocurrency is an ERC-20 token on the Ethereum blockchain with a fixed value of one USD. Dai is a functional stablecoin that reduces price volatility by regulating the value of the dollar and includes many decentralized financial services, or DeFi, for lending, borrowing, and trading. The value of the Dai digital currency has always kept in a constant range with the help of smart contracts called maker dao. Therefore, it is known as a reliable and decentralized stablecoin, which is a good alternative to fiat currencies, including the dollar.
The DAI stablecoin and the entire supporting protocol are built based on the MakerDAO ecosystem. MakerDAO is one of the Ethereum projects offering transparency and unparalleled economic and technical quality together. The Makerdao ecosystem can create stablecoins without supporting fiat currencies. In addition, price stabilization processes in this ecosystem are fully decentralized.
How does DAI stablecoin work?
The Dai currency maintains its stable value decentralized and in a smart and fun way. Supply for Dai Token varies according to market changes. Therefore, it has a stable price compared to other currencies. This is done through MKR tokens, CDP smart contracts, and other security mechanisms. Also, the digital currency DAI, unlike Tether, does not need a centralized authority based on fiat currencies and is not backed by any traditional bank. The project runs entirely on the Ethereum blockchain and its smart contracts. This problem makes the DAI stablecoin a truly decentralized coin that cannot be closed, verified, or controlled.
In addition to being a safe and stable payment method, Dai Currency provides cryptocurrency traders with a powerful risk mitigation tool. Also, during periods of high volatility often found in the cryptocurrency market, users may want to convert all or part of their funds into a stablecoin to reduce their losses. Dai Digital Currency also gives users access to secure loans in a way that offers many advantages over existing options. In this way, users of Dai coin can easily secure and lock digital assets as collateral, without the need for any confirmation.
Features of Dai Currency
The features and functions of Dai can be divided into two groups: normal and normal with other cryptocurrencies and different features. We see a list of features below.
- The dai help balance the risks in different gambling markets.
- Dai is a price-stable mortgage, which provides a license-free decentralized business guarantee for the maker’s mortgage debt.
- Dai eliminates expensive international transaction fees and middlemen and also offers the ability to reduce currency fluctuations.
- Dai conducts fully verifiable transactions, enabling various organizations, corporations, governments, and other entities to increase efficiency and subsequently reduce the likelihood of corruption.
What are the advantages and disadvantages of DAI?
Dai has all the advantages of a stablecoin, and its upgrade will create additional features. This cryptocurrency can be exchanged without an intermediary, no person or company has control over it, and no government or official can shut it down or stop it from working. The biggest advantage that distinguishes DAI from other stables is complete transparency, you can see how many assets are supported at any time. With MakerScan, you can see how much Ethereum or other cryptocurrencies are held as collateral. Compare this level of transparency to a cryptocurrency like Tether, which has always had rumors behind it.
But Token Die also has its disadvantages. DAI survived the big drop in the value of Ethereum and is always worried about the sudden drop in Ether and the cryptocurrency market compared to the dollar. In the event of a crash, thousands or thousands of CDPs may be issued before the price returns to normal. In addition, the entire project is built on the Ethereum blockchain, which is still prone to bugs and cannot be considered mature. Another issue that could pose a threat to Dai’s value is the system’s reliance on oracles to get Ether prices. If something goes wrong with Oracle it can cause problems.
The Future of Dai
The value of Dai is linked to the value of the US dollar. The increasing price stability of stablecoin DAI has led investors to view this digital currency not only as a long-term store of value but also as a legitimate option for trading purposes. Another feature we mentioned earlier is the integration of DAI into the Ethereum network. After buying or borrowing this stablecoin, it can be used in various decentralized applications including gaming, DeFi, and NFT tokens. Therefore, despite the wide application as well as the decentralization feature found in fewer stablecoins, we can hope for the future use of this stable currency.
Where to buy DAI cryptocurrency and what is the best wallet for it?
Besides Dai can be borrowed by investing on the Oasis platform, it is also possible to buy this stablecoin in most domestic and foreign centralized exchanges such as Binance, Coinbase, Kocoin, etc. DAI can also be traded on various exchanges such as UniSwap and SushiSwap.
Dai’s original token has an ERC20 standard; Therefore, the best Ethereum wallets such as TrustWallet, Metamask, etc. can be used for storage. A more secure option for long-term storage is hardware wallets like Ledger.