What is DAI?
This blog post will cover:
- What is DAI?
- Where did DAI come from?
- What are the advantages of DAI?
- What are the disadvantages of DAI?
- How to buy DAI on SimpleSwap?
What is DAI?
What is Dai (DAI)? Dai is the first stablecoin of the MakerDAO platform and its price is pegged to the US dollar rate. Being a stablecoin, DAI can be used as a tool for reliable storage of funds and for interuser payments. DAI stability is ensured not only by pegging to the dollar, it works on the CDPs and smart contracts technology. Dai developers offered their own innovative concept of exchange. The concept is based on the principle of collateral: a user freezes the required amount in Ethereum, and, depending on its volume, a smart contract issues new Dai tokens. Once all operations are completed, coins can be transferred back to ETH. At the same time, Dai tokens are being burned, which makes the maximum volume of emissions dynamic and relevant to user needs. DAI is a reliable source of stability in the face of volatility. It is a cryptocurrency that automatically reacts to emergent market conditions in order to stabilize its value against the major world currencies.
Where did DAI come from?
It is known that the first management meeting was held on January 16, 2016. Initially, the team was small, but now the number of people involved in the DAI project has reached the number of 33 people. Dai officially entered into circulation on December 18, 2017 as the first absolutely decentralized token on Ethereum. Since DAI itself is a project created on MakerDAO, its development team is the same: Rune Christensen is the project CEO and the founder of MakerDAO, Matt Richards - Project President, Soren Peter Nielsen is at the head of the development.
What are the advantages of DAI?
- The main advantage of Dai is its extreme stability
- Compared to its competitors, DAI, due to the principle of collateral using ETH, gives its users the confidence that it is attached to real assets and that they are available for exchange
- Transparency and reliability of the system
What are the disadvantages of DAI?
- With the DAI firmly linked to the US dollar, earnings by means of this coin are not possible
- Project competitiveness
There are other cryptocurrencies that also stabilize on the US dollar.
- System complexity for beginners
The return of collateral positions will require enough knowledge about the work of ETH, which undoubtedly reduces the number of users of the system.
How to buy DAI on SimpleSwap?
Let’s say you want to buy DAI. What should you do? We suggest you go to the SimpleSwap homepage and follow the instructions below:
- Choose the currency you want to exchange (e.g. BTC) in the first drop-down list. Enter the amount you would like to swap.
- Select DAI in the second drop-down list. You will see the estimated amount that you will receive after the exchange.
- Enter the Recipient’s Address. DAI will be sent to this address. Be careful and make sure you use the correct address.
- Check all the information you have entered. If everything is correct click the Exchange button.
- You will see the Bitcoin deposit address. You need to transfer the necessary amount of BTC to this address to start the exchange.
This is everything you need to know to buy DAI.