Fully launched on December 18 2017 for public use, Dai (DAI) is a stablecoin cryptocurrency that aims to keep its digital monetary value as close to that of the United States dollar. Although it is sometimes regarded as Sai, Dai is governed and regulated by an organization called Maker Decentralized Autonomous Organization (MakerDAO), whose financial activities are devoid of any traditional central financial authority. To ensure more inclusion, any registered members in any part of the world holding Dai’s official utility token MKR can also partake in the decision-making to ensure financial stability.
Like other stablecoins with dependency on the United States dollar, Dai is a decentralized, unbiased, stablecoin pegged to the United States dollar and operates on the Ethereum network and has its smart contracts written in the Solidity programming language. It can be traded or held in any cryptocurrency wallet developed on Ethereum or other supported blockchains.
Every Dai stablecoin in circulation is backed proportionately by excess collateral assets that is, the value of the collateral is higher than the value of Dai debt. Dai has a similar financial mechanism as other cryptocurrency coins and fiat money as it can be exchanged for the corresponding altcoin, transformed into a fiat currency, used as payment for goods and services, and can even be held as saving through a developed feature of the Maker Protocol called Dai Savings Rate (DAI).
The Maker protocol also called Multi-Collateral Dai (MCD) system allows users generate Dai by leveraging collateral assets approved by the managing aspects of the Maker Protocol, Maker Governance. This means users who deposit any collateral assets or cryptocurrency approved by this body get to borrow against their intended deposits and generate DAI. To ensure stability in the circulation of DAI, the MakerDAO controls the type of assets accepted, the number of the collateralization ratio, and the interest charged on borrowing and holding.
The Maker Protocol is also governed by the MakerDAO by deciding and enforcing key parameters like the stability and collateral interest rate and accepted collateral type on which all MNK holders operate on. The protocol consists of five current elements namely Dai Stablecoins, Maker Collateral Vaults, Oracles, and voting.
Who Are the Founders of Dai (DAI)?
Dai was developed and governed by the Maker Foundation and the Dai Foundation and each with its own responsibilities.
MakerDAO was founded in 2014 by a Danish entrepreneur, Rune Christensen.
According to Rune, the word DAI is based on a Chinese character, which when translated to English, means ‘to lend a loan or provide capital’. He studied biochemistry at the University of Copenhagen and also studied International Business at the Copenhagen Business school. He also served as a co-founder of a company providing international recruiting, Try China.
In 2018, MakerDAO formed the Maker Foundation which ran from Copenhagen and helps the ecosystem exist independently by performing various functions. For example, writing codes needed for the platform’s adaptation and functionality.
The Maker Foundation serves as the founding father and the developer of the Maker Protocol and its external partnership and also aims to achieve total financial decentralization as it works hand-in-hand with the MakerDAO community.
The Dai Foundation has no affiliation to the Maker Foundation and operates as an independent body. It safeguarded the Maker Foundation’s intangible assets such as trademarks and copyright. As stated in its Dai Foundation Deed of Trust, its main aim is to protect Maker what cannot be digitalized decentralized in the Maker Protocol.
What is Dai (DAI) Used For?
Dai stablecoin obeys the four functions of money band they include:
Dai as a Store of Value
Before an item is regarded as a store of value, it must be able to retain the accrued value for a long time and not wavering to the tides of financial depreciation. Dai presents itself as a perfect store of value as it retains its $1.00 value and does not obey the volatility of the digital market.
Dai as a medium of exchange
A medium of exchange is anything that can be presented for an equal value of another material. It is used to facilitate trade, that is buying and selling of goods and services. Since Dai is recognized worldwide and is being offered for sale on popular exchange platforms, it is a perfect medium of exchange.
Dai as a unit of account
A unit of account is the standardized value used in trading goods and services and a popular example is fiat currencies like USD, YEN, EUR. Dai can be recognized as a unit of account because, under normal financial circumstances, its value should always be $1. Although it may not be recognized as a unit of account offline, it is on the Maker protocol and all other decentralized apps that allow for the trading of Dai.
Dai as a standard of deferred payment
As one of its stated purposes, Dai is used in settling debts within the Maker Protocol.
The MKR token allows users to take part in the Maker Governance
Users who hold any amount of MKR tokens can partake actively in issues that require financial development in the ecosystem. The higher the number of tokens held, the greater the power accrued.
What Is the Unique Point of the Dai (DAI)?
There are several unique points of Dai and some of these points include:
The ecosystem allows for members’ inclusion by allowing all token holders to play a part in the maker’s governance protocol. Any voter-approved modifications await a 24 hour delay time once the holders activate the Governance Security Module (GSM). This delay protects the holders from any malicious attacks in disguise as a proposal, and if the proposal confirms a threat, it triggers a Shutdown.
The MKR’s token in a recapitalization in case of debt
If the system debts exceed its set-down supply, then recapitulation mode sets in by increasing the token supply through a debt auction. This risk inclines MKR holders to responsibly partake and govern the MKR ecosystem to prevent excessive risk-taking.
An emergency shutdown mechanism to protect Maker Protocol against attacks
The emergency shutdown serves two main purposes, one is to shut down the ecosystem to protect the Maker Protocol from attacks on its infrastructural development and the second is to facilitate the Maker protocol system.
The token holders can activate this last-resort emergency if a substantial amount is a necessary action to take and will benefit their financial holdings.
How Many DAI is in Circulation?
There are approximately 5.62 Billion DAI tokens in circulation.
Is Dai (DAI) Network Secured?
The Dai network is very secured as the technology incorporates the best of Ethereum and sovereign blockchains into a full-fledged multi-chain system. Before the Dai network can be hacked successfully; such a person or group of people must possess 51% mining power. Despite the possession of over half of the mining power, the remaining 49% can choose to accept or reject the false blocks and successfully fork into a new chain.
These in-built, in-safe precautions save the socio-economic activities that go on the platform, and the users intending to hack lose all their blocks of worth.
How Do I Buy Dai (DAI)?
Dai (DAI) is a very popular project and is listed on several exchange platforms for sale and exchange and also on DAI’s proprietary Maker Protocol. All you have to do is to sign up a member by providing necessary details such as your name, email, SSN, licensed document, and profile. This information should be inputted carefully and correctly with the aid of a stable internet supply.
You can also DAI by depositing Ethereum-based assets using the Maker Protocol. Your collateral value is inversely proportionate to your borrowing limit.
These platforms offer versatile modes of payment, which may include your debit or credit card or other financial apps like Paypal or Payoneer. Type in the number of DAI tokens you need. The platform will direct you to an already linked payment platform.
After linking up the payment method, or inputting your debit or credit card details, confirm the transactions from both parties: your bank or financial app and the exchanger, withdraw the purchased tokens and transfer to a personal cold wallet.
Before DAI can be gotten, it requires a huge deposit of collateral value to ensure the network liquidity. Ensure your borrowing limit is higher than your desired number of DAI.
Which Cryptocurrency Wallet Supports Dai (DAI)?
The PTPWallet platform supports many cryptocurrencies simultaneously such as Dai. Because of its vast use case, it has grown to become one of the most used platforms as it serves as an exchange and an engine to discover other cryptocurrencies. Additionally, users can easily use PTPWallet as their Dai wallet because offers a simple and interactive interface making it easy for people to navigate its system.