- DAI is an element of the Maker protocol, which is built on the Ethereum blockchain.
- DAI Saving Rate refers to a process where any DAI holder can earn interest by locking their DAI coins.
Dai is a stablecoin that is pegged to the US dollar. It was developed in December 2017 by the Maker Foundation to facilitate day-to-day transactions. Unlike other stablecoins, DAI was also created as a substitute for fiat currency.
It was formerly known as SAI. DAI is a decentralised crypto currency that is not controlled by anyone and all transactions are recorded on the blockchain, which can be accessed by every individual in the network.
DAI holds the unique property of being an unbiased crypto currency, which is helpful for businesses and individuals. It is a collateral backed cryptocurrency, pegged to the US dollar and tries to maintain a 1:1 ratio with fiat currency.
DAI is an element of the Maker protocol, which is built on the Ethereum blockchain. It can be held in crypto wallets and within the platform. It is supported on the Ethereum blockchain and other blockchains.
Users can generate DAI stablecoin by depositing collateral assets in the Maker protocol. Through this, new DAI coins are introduced in the blockchain and other than this, an individual can get DAI coins via e-payments or they can buy it from an exchange or from a broker.
About the DAI Saving Rate
DAI coins can be used to make payments of goods and services. Moreover, users can earn interest on their deposited DAI coins through a unique feature of the Maker protocol, known as the DAI saving rate.
DAI Saving Rate refers to a process where any DAI holder can earn interest by locking their DAI coins in a DSR contract in Maker protocol. There is no minimum amount of coins that should be locked in the contract and users can exit the contract whenever they want.
The target price of DAI stablecoin is $1 and tries to maintain a 1:1 ratio with the pegged fiat currency, in this case the US Dollar.
DAI Functions Which are Similar to Money
- Store of value
- Medium of exchange
- Unit of accounts
- Standard of deferred payment
Market for DAI Stablecoin
- DAI crypto coins can be used in the area of the working capital requirement of businesses, in hedging and in collateralized leverage.
- Merchant receipts, cross border transactions and remittances are also markets where they can be used instead of money.
- This digital coin can be used in gaming as a reward or for purchasing in-game materials.
- At last, for donations to NGOs and for charity work, DAI coins can also be used.
Current status
Currently, there are 4.7 billion DAI coins in circulation and its market capitalization is close to $4.40 billion. The total supply of DAI coins on the market is 4.40 billion. At the time of writing, the market price of 1 DAI is 1 USD, according to coinmarketcap.
Tether, USD coins and Binance are similar to DAI, they are also stable coins whose value remains close to one in comparison to one dollar.
Conclusion
DAI stablecoin, part of the Maker protocol, offers stability and decentralisation, making it an attractive choice for everyday transactions and businesses. With its DAI Saving Rate, users can earn interest on their holdings, enhancing its appeal as a store of value. As a leading stablecoin, DAI has found various use cases, from working capital to gaming rewards and charitable donations.
