Dai is a stablecoin cryptocurrency based on the Ethereum blockchain. The coin was created in 2017 by MakerDAO, a decentralized organization established in 2014.
Like all stablecoins, it is pegged to another currency, so 1 Dai always equals $1, with some exceptions, as you can see in the graph above. This is usually balanced quickly or stays within the range of a couple of cents.
If for some reason you want to invest in Dai now, here are some things you should know about this cryptocurrency.
Stablecoins are pegged to their target currency in different ways. They can be backed by fiat, like USDT and Gemini, they can be backed by crypto, commodities, or algorithmic.
Dai is a crypto-backed coin that uses ETH as collateral. Dai is special because its price is managed by an automatic system of smart contracts on the Ethereum blockchain. So one thing to keep in mind is that working with Dai is that transactions can be expensive due to the high gas price on the Ethereum network.
Dai stands out from other stablecoins for a few other reasons. It is decentralized, managed by an autonomous organization and democratically governed. It is built on the Ethereum blockchain and anyone can create Dai. New coins can be created by depositing ETH as collateral into Maker Vaults that work on the Maker Protocol.
Dai can be borrowed in the same way by depositing Ether. In order to ensure the price stays pegged to the dollar, the Maker platform requires a higher amount of ETH to get Dai to cover for the possible losses.
It is integrated very widely with the Ethereum network, so crypto enthusiasts often invest in Dai to use it with DeFi applications and services, for example, microloans, gaming, and NFTs. The best way to invest in Dai is of course when you use it to make more money, because it won’t bring any by itself.
Investing in Dai can be used as an alternative cash reserve. Just like many crypto traders use Tether (USDT) to or to take profits from trades with crypto, Dai can do the same in the DeFi world. A Dai investment can be used to protect yourself from volatility when trading DeFi coins.
Should you invest in Dai today? Even though Dai is a stablecoin is not affected by the current market turmoil, think twice before starting to do something with DeFi. If you want to invest safely, why not try stocks.
If you’re asking where can I invest in Dai, first check your crypto exchange, it’s available on all the major ones like Coinbase and Kraken. If not, register with one of them.
Check back to this page to check the DAI price now or current prices on the biggest cryptocurrencies and stocks. By the way, before you invest in DAI, why not check out our stock hub to get good traditional investment ideas with stock prices.
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