Recently, the cryptocurrency industry has grown dramatically, with Bitcoin setting the pace. A surge of acceptance for cryptocurrencies may be underway now that major international financial institutions are starting to invest in Bitcoin.
Volatility is both a positive and negative characteristic of cryptocurrencies. While some traders see it as an exciting opportunity, others argue that high volatility makes cryptocurrencies an unreliable investment.
Here’s where stablecoins come in as a sort of answer that traders frequently utilize to reduce their exposure to the significant price swings that are generally present in cryptocurrencies. The Dai token is currently the most popular stablecoin.
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What is Dai (DAI)?
Dai is a cryptocurrency that intends to maintain a constant value of one US dollar. Thus, one Dai must equal one USD. Therefore, Dai is a stablecoin as the term is used.
Dai is the native token of Maker, a decentralized autonomous organization that runs on Ethereum. It is different from other stablecoins because it is not managed by a central authority.
How Does DAI Operate?
When a borrower pledges property as collateral, it is known as a dai. The dai is destroyed when the loan is paid back. A new DAI will be created if you deposit Ether or one of the other cryptocurrencies recognized as collateral. The locked collateral will be released once the borrowed Dai has been repaid.
Dai stablecoin can be created by anyone since it is based on the Ethereum blockchain and doesn’t require authorization. The Ethereum-based self-enforcing smart contracts keep a public record of every action taken on the blockchain, making it less susceptible to corruption.
Since Dai is a cryptocurrency that has a stable value of one dollar, it is used to maintain the bitcoin price todayin the event that the cryptocurrency’s price experiences a dip. This practice is called “price stabilizing” and helps to ensure that the value of bitcoin does not fluctuate too wildly.
Ways To Sell Dai
By navigating the New interface and selecting your preferred payment method, you may quickly sell DAI tokens if you already own it and keep it in your cryptocurrency exchange wallet like KuCoin.
One of the most popular cryptocurrency trading pairs is BTC USDT. This pair represents the value of Bitcoin (BTC) against the US dollar Tether (USDT). Tether is a stablecoin that is pegged to the US dollar, so it offers traders a way to trade cryptocurrencies without the volatility associated with Bitcoin.
How to Purchase DAI
You can choose to purchase DAI by creating an account with the aid of a cryptocurrency broker that accepts the token, such as KuCoin or Coinbase.
The following action is to decide on a wallet based on your particular investment objectives and interests. This step is essential because else you would have to put your tokens in a wallet. Additionally, this makes sure that you receive the personal keys that might be used to keep money that isn’t at risk.
It’s time to make your buy after you’ve chosen your wallet and opened an account with a broker. You would need to fund your broker account, select your order type, and then submit the order in order to do this.
Is DAI Worth Buying?
By using smart contracts, obtaining a loan from DAI eliminates interference from outside parties. In addition, those who want to borrow money pay lower interest rates. There is no third party to deduct interest from the lender’s account.
Thus, it is evident that using DAI to obtain loans is advantageous for all parties involved. Mutual agreement may be reached on the rate of interest to be charged while repaying the loan.
The extent to which DAI is embedded into the Ethereum blockchain is another advantage that makes it special. It can be utilized in countless decentralized applications, such as gaming, DeFi, and NFTs, once it has been purchased or borrowed.
Not only that, transactions may also be finished in a matter of minutes at any time and on any day of the year thanks to DAI and the Ethereum blockchain.
Lastly, there is no minimum balance requirement to use DAI, whereas many people around the world lack the assets enough to qualify for opening a bank account.
In Conclusion
There are different stablecoins available. Dai, however, is genuinely distinctive because it is an ERC-20 token built on the Ethereum platform. Dai is unique among its peers due to its democratic system of government.
Dai keeps the value of a dollar constant, making it a useful hedge against inflation. Although other stablecoins may aim to do this, Dai stablecoin stands out because it accomplishes this through an automated system of smart contracts on the Ethereum blockchain.
Stablecoins like DAI play a significant role in the cryptocurrency market and support significant advancements and functionality.
Mining DAI tokens, purchasing them or engaging in other DAI token-related activities are your choice. However, you should always do your own research before making a decision.