DAI: what is it, what advantages does it have and what is its price
DAI is the name of one of the most well-known, accepted and used stablecoins in the crypto ecosystem. Like the other stablecoins, its value is stable and is anchored to some other asset, in this case the value of the dollar. It is the only decentralized stablecoin pegged to the US dollar. We invite you to learn everything about this cryptocurrency so that you can invest in it.
What is the price of DAI?
The price of DAI is linked to the price of the US dollar on a 1:1 basis, meaning that each DAI is equal to one dollar. We invite you to see our graphs to know its price.
DAI to dollar
As we mentioned earlier, the value of one DAI is equal to the value of one US dollar.
What is DAI?
We invite you to learn what DAI is and why it is different from the vast majority of cryptocurrencies. DAI is the first decentralized stablecoin that is tied to the dollar: it maintains a value of 1 to 1 with the North American currency. It is the only cryptocurrency generated by its users through escrow, which allows it to keep its value stable at $1. For this reason it is often called a “digital dollar”: it has a stable and constant value, which makes it serve as a value safeguard against inflation and devaluation.
Who are the founders of the DAI?
DAI is an Ethereum-based stablecoin created by the decentralized autonomous organization (or DAO) called MakerDAO. This means that there is no person or a small group of people who created the currency, but rather that the decisions were made by all those who make up the organization. The issuance of this coin is controlled by the Maker protocol.
Characteristics of the DAI
- DAI serves as a value safeguard against inflation and devaluation.
- Allows you to buy dollars outside the established limits.
- Its price does not fluctuate like that of other cryptocurrencies.
- Sending remittances is easier with DAI.
- It allows you to receive payments from abroad in a simple way.
- It is fully interchangeable with other cryptocurrencies.
How does crypto DAI work?
The key to understanding how DAI works is to understand how the Maker protocol works. This protocol works on many smart contracts executed on the Ethereum network that is responsible for ensuring the proper functioning of this stablecoin, that is, it ensures that the reserves remain stable in order to maintain that parity with the US dollar. Although that is its main function, it fulfills others: control interest rates, control the issuance and burning of tokens and many more.
But if we go to the purest operation, this is possible thanks to what we know as Maker Vaults, which allow interaction with the Maker protocol. This allows that, when depositing to get our DAI, the Maker Vaults indicate a series of variables that we must read and accept. Once this action is done, our tokens are locked and we receive DAI in exchange to an ERC-20 address. If you are wondering how the reverse path is done, it is the Maker Vaults themselves that allow it: we send DAI and receive the collateral, burning the DAI that we gave.
Advantages and disadvantages of the DAI currency
Stablecoins are a particular type of cryptocurrency that has many advantages, although like everything they also have certain disadvantages that are worth mentioning. Let's see what they are in the case of DAI.
Advantages of the DAI virtual currency
- It is safe: it has a long history that supports this statement
- It is decentralized: it does not depend on any bank, so no account can be frozen or closed
- It is accepted in exchange houses: it is very easy to exchange DAI for fiat money or other cryptos.
- Credit: allows you to generate credit and earn interest on it.
Disadvantages of the DAI Token
- Difficult to understand:It is not the easiest system to understand if you are just starting out.
- Limited Collateral:Not all coins can be used as collateral, at least not yet.
USDT vs DAI vs USD Coin: Differences and similarities of these stablecoins
Although at first glance all stablecoins seem to be identical, there are differences between them that are worth mentioning and knowing before investing. Let's review what these similarities and differences are so you can choose the one that best suits you.
Similarities between these stablecoins
- Their value remains 1 to 1 with the US dollar
- Their value remains stable
- They are backed in one way or another
Differences between USDT, DAI and USD Coin
- USDT It is not anonymous or decentralized, behind its issuance is the Tether company. They do not guarantee 1 to 1 change as per their terms and conditions.
- Circle, the USDC regulator, indicates that it can freeze funds at its sole discretion. Circle is registered as a money transmitter in the United States, so USDC is subject to official monetary policies. Trades with this stablecoin may take longer than trades with the others.
- DAI charges a commission in order to guarantee stability.
What will be the future of the DAI cryptocurrency?
As we have seen, DAI is a completely decentralized and transparent stablecoin, which works thanks to smart contracts on the Ethereum network. We know that, within the crypto world, all these elements are sought after and the tokens that comply with them are usually the most used in the ecosystem. As more tokens are added to be able to exchange for DAI, this stablecoin will continue to grow and expand its audience.
As for its value, in countries where we do not use the dollar as an official currency, we can say that it is possible that it will continue to grow, as the US dollar usually does.
DAI - Frequently asked questions
What does DAI mean?
DAI is the name of a stable cryptocurrency or stablecoin, which maintains its value 1 to 1 with the US dollar. It is known as the “digital dollar” for that reason.
How much does a DAI cost?
Since it keeps its value stable with the US dollar, its price tends to fluctuate constantly. You can enter Satoshi Tango to see our charts and quotes for all our cryptocurrencies.
How much is a DAI in dollars?
DAI is a stablecoin or stable currency whose value is tied to that of the US dollar, so it maintains a 1:1 relationship with this currency. That is, 1 DAI is equal to 1 dollar.
What is the most stable cryptocurrency?
Stable cryptocurrencies are known as stablecoins. They have the characteristic of not suffering fluctuations in their price since they are anchored to the value of another currency.
What is the difference between DAI and USDT?
The main difference between them is that DAI is decentralized and anonymous, while USDT is the opposite as it is issued and controlled by a company called Tether.
How many DAI coins are there in circulation?
The issuance of DAI is infinite, it does not have a maximum number. Currently, we know that there are around 9,200,000,000 coins in circulation.
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