DAI is a Stablecoin Cryptocurrency
I stopped making excuses and decided to set up an account to start trading cryptocurrency. I noticed DAI was a coin listed for trading and did a little research.
“Dai (or DAI, formerly Sai or SAI) is a stablecoin cryptocurrency which aims to keep its value as close to one United States dollar (USD) as possible through an automated system of smart contracts on the Ethereum blockchain. Dai is maintained and regulated by MakerDAO ...” (Wikipedia)
Currently, it's exchange rate is $1.00 USD. According to Motley Fool, “Dai is a great example of what can be accomplished with smart contracts.” These are the 5 things you should know about this crypto coin before you decide to trade.
1. It is a decentralized stablecoin tied to the value of the US dollar
2. It is backed by Ethereum and other US dollar stablecoins
3. Even though it tries to maintain a stable value of $1, sometimes the price fluctuates
4. You can lend it OR use it as a hedge against market volatility (i.e. trade the volatile cryptocurrencies, like Bitcoin or Ethereum, and then exchange when prices go up again; OR you can stake it.)
5. It works well for money transfers
There are a lot of positives that make me think this crypto coin is a good investment.
Daly, Lyle. “5 Things to Know Before You Buy Dai.” The Ascent, A Motley Fool Service, 1 Sep. 2021, https://www.fool.com/the-ascent/cryptocurrency/articles/5-things-to-know-before-you-buy-dai/.
I think DAI has its own advantages, compared to other stablecoins, DAI is often used as loan capital with Ethereum collateral in MakerDAO, so the transparency of DAI is very high, Because the value of DAI is stable so it is widely used by investors to take advantage of crypto whose prices are reaching peaks.
I was not aware that DAI was formerly called SAI. Thanks for enriching my knowledge. Stable coins like DAI were launched to minimize the risk associated with crypto trading and investment. Since the price is pegged with fiat currency, there is no chance of losing money. A lot of stable coins have reserve with DAI.