What is DAI Coin?
DAI Coin is a US dollar stablecoin, meaning each DAI token is designed to always be equal in value to 1 US dollar. Stablecoins aim to keep cryptocurrency valuations stable, as opposed to the wide swings observed in the prices of other popular cryptocurrencies. This allows stablecoins to be used as a medium of exchange and a mode of storage of value, instead of being used as a medium of speculative investments.
Dai is maintained and regulated by MakerDAO, a decentralized autonomous organization (DAO, composed of the owners of its governance MKR, who may vote on changes to certain parameters in its smart contracts in order to ensure the stability of Dai. Together, Dai and MakerDAO are considered the first examples of decentralized finance to receive significant adoption.
Real World Example
Users can send DAI tokens to one another using the Ethereum blockchains. This is a decentralized method to transfer funds at low rates. Transfers can be sent directly without the need for a governing body or institution to mediate the transaction.
Fun Fact
Unlike many other stablecoins that are backed by dollar reserves, DAI is built on the Ethereum network and backed by Ether, meaning it is completely decentralized because its price stability is sustained on through a system of smart contracts, and does not rely on any banks, governments, or other centralized third parties.
DAI Coin Links
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