DAI is a decentralized stablecoin created in 2015 by MakerDAO and built on the Ethereum blockchain. MakerDAO is a decentralized autonomous organization (a kind of company that runs itself in a decentralized manner via the use of smart contracts) on the Ethereum blockchain. DAI aims to be a truly decentralized crypto asset.
Why DAI is Unique
- DAI's reserve funds are a mix of other crypto assets as collateral every time a new DAI is minted (created) and soft-pegged to the US dollar
- DAI isn't run by a private company but by a decentralized autonomous organization using software protocol
- DAI is developed more democratically - by direct voting using its governing tokens Maker (MKR)
- DAI's system is more transparent and less prone to corruption
What Gives DAI Value?
- DAI is using crypto assets loaned and pledged in ETH for its reserved funds
- A stable price following US Dollar
What Affects the Price of DAI?
- US dollar's price
- Supply and demand of DAI
How Secure is The DAI Network?
DAI is an Ethereum-based, ERC-20-compatible token. Therefore, it is secured by Ethereum's Ethash algorithm.
What makes Dai different from other stablecoins?
Compared to other stablecoins, Dai claims to be a truly decentralized stablecoin because MakerDAO is an autonomous body rather than a company.
Is one Dai always worth exactly one USD?
No, DAI is soft-pegged and doesn't perfectly track the price of US dollar. But, DAI offers stability and low volatility against the US dollar.