DAI is an algorithmic stablecoin issued by MakerDAO, an Ethereum-based protocol, that seeks to maintain an exact ratio of one-to-one with the U.S. dollar. It’s mostly used to lend and borrow crypto assets without the requirement for an intermediary, resulting in a permissionless system with minimum constraints and transparency.
What is DAI?
The Maker Protocol and the MakerDAO decentralised autonomous organisation are in charge of issuing and developing DAI, an Ethereum-based stablecoin (stable-price cryptocurrency). DAI is soft-pegged to the US dollar and is backed by a mix of other cryptocurrencies that are placed into smart-contract vaults whenever new DAI is created.
It’s vital to distinguish Multi-Collateral DAI from Single-Collateral DAI (SAI), an early version of the token that could only be collateralized by a single cryptocurrency; SAI also doesn’t support the DAI Savings Rate, which allows users to save money by keeping DAI tokens.
How Does DAI Work?
DAI is an ERC-20 token that may be bought on controlled and decentralised markets alike (DEXs). You can also generate and borrow DAI by creating a Maker collateral vault and depositing Ethereum-based assets as collateral through MakerDAO’s Oasis Borrow dashboard.
Maker collateral vaults, also known as collateralized debt positions (CDPs), are smart contracts that keep collateral in escrow until the borrowed DAI is returned. The amount of collateral you deposit must always be more than the amount of DAI you receive. Your collateral will be liquidated if the value of the collateral falls below the value of the issued DAI tokens.
DAI is one of the blockchain’s most integrated digital assets. DAI is one of the blockchain ecosystem’s most integrated digital assets, and once borrowed, it can be used in decentralised finance (DeFi) apps or blockchain-based games, among other things.
What Makes DAI Unique?
DAI is an ERC-20-compliant Ethereum-based token. As a result, Ethereum’s Ethash algorithm protects it. DAI is distinguished by the fact that it is run by a decentralised autonomous organisation using a software protocol rather than by a commercial firm. As a result, Ethereum-powered self-enforcing smart-contracts manage and publicly record all instances of token issuance and burning, making the entire system more transparent and less prone to corruption.
Where Can You Buy DAI (DAI)?
You must first open an account with a reputable Cryptocurrency exchange to begin trading and investing in cryptocurrencies. A cryptocurrency exchange is a platform that allows you to trade Digital currencies.
Let’s say you want to buy DAI in India and want to acquire the best price as quickly as possible. BuyUcoin Exchange is the sole exchange you’ll need to start investing in DAI in such an instance. You can even invest in DAI with your debit card through MasterCard, NEFT or UPI.
Is DAI A Good Investment?
The value of DAI is soft-pegged (or connected) to the US dollar. The enhanced price stability provided by DAI stablecoins has prompted investors to consider DAI not only as a long-term store of value, but also as a viable option for day-to-day transactional reasons, considerably boosting the utility of blockchain technology and cryptocurrency systems in general.
DAI coin price projection for 2022 is $1.01, and $1.01 in 2023 and 2024, staying at that price until 2031, according to DigitalCoinPrice. In five years, it may be worth $5.67, breaking the $2 barrier in May 2024, according to government capital.
However, you must conduct your own research. When looking for DAI cryptocurrency forecasts, keep in mind that values can go up and down, and you should never spend more money than you can afford to lose.
Tokens – DAI, DAI-INR, INR-DAI, USDT-DAI, DAI-USDT