[{"category":{"name":"BitScreener Exclusive","exported_url":"bitscreener-exclusive"},"id":"0d3ec986-2df3-4a2e-9c0f-a31a3a384dd1","updated_at":"2022-06-29T12:18:00+00:00","account":{"firstName":"Marigold","lastName":"Vance"},"description":"Used as a lending and borrowing crypto asset without the use of an intermediary, DAI contributes to the creation of a permissionless system with transparency and few restrictions. Let’s take a deep dive into DAI!","sapo":"Used as a lending and borrowing crypto asset without the use of an intermediary, DAI contributes to the creation of a permissionless system with transparency and few restrictions. Let’s take a deep dive into DAI!","title":"Dai (DAI): The world’s first unbiased currency","content":"

History of DAI

DAI was not founded by a single person or a small group of co-founders. The MakerDAO and Maker Protocol oversee the development of DAI as well as the issue of new tokens.

MakerDAO was founded in 2014 by a Danish entrepreneur named Rune Christensen.

On December 18, 2017, Dai, originally known as a single-collateral DAI (SCD or “SAI”) backed by ETH, was officially launched on the main Ethereum network.

In 2018, MakerDAO formed the Maker Foundation to bootstrap decentralized governance of the project and drive it toward complete decentralization.

Created by the Maker Foundation, the Maker Protocol serves as the architecture underlying the DAI stablecoin.

In November 2019, DAI began to use multiple assets besides ETH as collateral, making DAI a multi-collateral stablecoin.

In July 2021, CEO Christensen announced the complete decentralization of MakerDAO and the dissolution of the Maker Foundation.

Overview of MakerDAO and DAI

MakerDAO is an open-source lending project on Ethereum as well as a decentralized autonomous organization founded in 2014.

The two main and essential components of the project are the DAI stablecoin and the MKR Token:

Dai (DAI) is a stablecoin mortgaged by cryptocurrency and pegged to USD with a 1:1 ratio.
Maker (MKR) is the governance token of MakerDAO, used to manage and restructure the project's capital.

MakerDAO is among the first lending projects on the market with numerous great achievements. DAI is currently the stablecoin with its capitalization ranking the first in DeFi and the third in the whole crypto market, just behind USDT and USDC.

About DAI token

Multi-collateral DAI (Symbol: DAI) is a USD-pegged stablecoin built on the Ethereum blockchain, and has no centralized authority. Its $1 USD equivalent is maintained through automatic pricing mechanisms built into smart contracts.

When DAI is worth more than $1, the smart contract pricing mechanisms works to decrease the price. Conversely, when Dai is worth below $1, the smart contract pricing mechanisms works to increase the price.

DAI can be freely traded like any other ERC-20 token, and anyone with an Ethereum wallet can own, accept, and transfer it without a middleman.

How DAI works

DAI is an ERC-20 token which can be purchased from both centralized exchanges (CEX) and decentralized exchanges (DEX). Users can create and borrow DAI by a Maker collateral vault and collateralize Ethereum-based assets.

Maker collateral vaults - formerly collateralized debt positions (CDPs) - are smart contracts holding collateral until the borrowed DAI has been returned.
The value of the collateral deposited must always surpass the value of the issued DAI. If the collateral value is lower than that of DAI tokens released, your collateral will be sold off.

DAI is among the most integrated digital assets within the blockchain ecosystem and can be utilized in DeFi applications or in blockchain-based games.

Features of Dai (DAI)

Dai holds key features and use cases as follows:

As a value store: DAI is created to function as a store of value that maintains its value with almost no depreciation even in a volatile market.
As an exchange medium: DAI is utilized for all kinds of transactional purposes, indicating a value standard, and facilitating the purchase, or trade of crypto.
As an accounting unit: DAI has a target price of 1USD (1 DAI = 1 USD). Despite not being used as a standard measurement of value in real world, the token functions as a unit of account within the Maker Protocol and several blockchain dapps.
As a deferred payment standard: DAI is utilized to pay debts within the Maker Protocol. For example, participants use Dai to pay the stability fee and close their vaults. This benefit makes DAI outstanding from other stablecoins.

Outlook on DAI

As a decentralized lending platform, MakerDAO's goal is to expand the demand for DAI, develop DeFi, and use DAI to replace the dominance of centralized stablecoins so far.

With the current groundbreaking development of MakerDAO in particular and the DeFi market in general, the demand for DAI will rocket without a doubt.

Explore all the trending topics and hottest news in the crypto market with our Blogchain.

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Dai (DAI): The world’s first unbiased currency

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