Dai is one of several attempts to create a stablecoin linked to the US dollar in the cryptocurrency market, hoping to make it suitable for everyday trading. This Ethereum-based project aims to leverage the benefits of blockchain technology while avoiding the wide price fluctuations seen in the cryptocurrency market.
What is Dai?
Dai is a cryptocurrency built on the Ethereum network. It is a stablecoin, meaning that Dai is pegged to the US dollar, which leads to reduced price volatility compared to other blockchain-based currencies. The low volatility also helps avoid the hyperinflation that Venezuela has experienced in recent years.
Special Features of Dai
Dai is not necessarily the largest or the biggest stablecoin. The trading of Tether, another stablecoin pegged to the US dollar, was launched in 2014, and its market capitalization was 11 times that of Dai in July 2021. However, due to MakerDAO, which is governed by a self-sustaining organization, Dai claims to be a truly stablecoin.
How to Mine Dai
Dai is not mined like most cryptocurrencies. Unlike Bitcoin, where once all Bitcoins in existence are mined and traded, the total number of Bitcoins in the universe becomes what will be in circulation, Dai does not have a strictly limited or fixed supply, which is part of how the currency maintains its stability.
How to Purchase Dai
Dai can be traded on cryptocurrency platforms like Coinbase and Kraken. The Maker ecosystem is supported by many applications and services, all of which are listed on the currency’s website.
Dai is also supported by several different wallets, categorized as follows:
- Hardware wallets: Trezor, Ledger, KeepKey
- Web/Paper wallets: MyCrypto, MyEtherWallet
- Mobile wallets: Coinbase Wallet, Guarda Wallet, Celsius DexWallet, etc.
Each type of collateral has specific fees and stability prices set by MakerDAO. A small amount of interest accumulates annually in Dai based on the specific type of collateral.
Source: https://www.thebalancemoney.com/dai-coin-explained-5193940
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