DAI is created with a smart contract on the Ethereum blockchain that is meant to maintain a one-to-one ratio with the US dollar. This stability makes DAI a useful cryptocurrency for people who want to avoid the volatility that can be present in other digital assets.

DAI (DAI) is a stable, decentralized currency. It's created via the Makers (MKR) Dai Stablecoin System. It uses margin trading to respond to changing market conditions and preserve its value against the major world currencies. Unlike other stablecoins whose value is backed directly by USD, DAI is backed by crypto collaterals accessible publicly on the Ethereum blockchain.

Advantages of DAI

One of the stated advantages of the DAI cryptocurrency is its stability. DAI also professes to be a reliable option for users in countries with unstable currencies who need to keep USD holdings. DAI's blockchain technology is always available online through a decentralized network of servers, providing fast payment processing times. Customers can receive instant payments at any time, bypassing the delays of wire transfers and bank clearing processes.

Security meets flexibility

Another key advantage is security as DAI offers secure cryptocurrency wallets for deposits to ensure funds are safe from theft.

Low Barriers to Entry is yet another proclaimed benefit of DAI, which is available across many countries and crypto exchanges. It doesn't require a minimum account balance, making it an attractive option for small cryptocurrency investments. DAI also allows users to withdraw additional funds over daily withdrawal limits imposed by some governments in low-income countries.

DAI holdings can earn account holders extra funds through interest payments set by the annual savings rate.

Who is MakerDAO, the issuer of DAI?

MakerDAO is like a bank that runs on the internet, using a special computer system called the Ethereum blockchain. This bank has created a special kind of digital money called DAI that is designed to always be worth the same amount as the US dollar.

Unlike a regular bank, which is controlled by a few people behind closed doors, MakerDAO is controlled by a group of people who own special tokens called MKR. These token owners can vote on important decisions that affect the bank and the value of the digital money it creates.

There are a few different ways to acquire DAI

You can buy it on different exchanges, both centralized and decentralized. Or you can create it by depositing other cryptocurrencies into a Maker collateral vault. This is like a digital savings account that holds your collateral in escrow until you pay back your loan.

When you put your cryptocurrency into a Maker collateral vault, you are essentially taking out a loan in DAI, which you can then use for different purposes like trading, investing, or participating in decentralized finance (DeFi) applications.

You can also use it to purchase other cryptocurrencies or goods and services that are priced in DAI. When you're finished using DAI, you can either sell it on an exchange or use it to repay your loan and recover your collateral.