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DAI is a stablecoin created through the Maker Protocol, a decentralized finance (DeFi) platform built on the Ethereum blockchain. DAI is generated by users who deposit collateral, such as Ether, into Maker Vaults and then mint DAI against that collateral. The Maker Protocol uses a system of smart contracts to ensure that the value of the collateral consistently exceeds the value of the DAI created, which helps to maintain the stability of the DAI token.
Easily buy DAI tokens on the OKX cryptocurrency platform. One available trading pair in the OKX spot trading terminal is DAI/USDT.
Swap your existing cryptocurrencies, including XRP (XRP), Cardano (ADA), Solana (SOL), and Chainlink (LINK), for DAI with zero fees and no price slippage by using OKX Convert.
DAI holders can store their tokens in various cryptocurrency wallets, including hardware and software wallets. However, storing DAI in a secure wallet is essential to protect it from potential hacks or theft.
We provide a highly secure and multi-chain OKX Web3 Wallet with all OKX accounts. It can safely store DAI or any other cryptocurrency for as long as needed. In addition, the OKX Web3 Wallet features bank-grade security and inbuilt access to hundreds of decentralizedapplications (DApps) and the OKX NFT Marketplace.
The Maker Protocol is a DeFi platform that powers the creation of the DAI stablecoin. The Protocol uses a system of smart contracts to allow users to deposit collateral into Maker Vaults and mint DAI against that collateral.
The Maker Protocol also includes the MakerDAO governance system, which allows users to vote on changes to the platform, such as adjustments to the stability fee or collateralization ratio. The Maker Protocol is designed to be decentralized and transparent, with no central authority controlling the creation or management of DAI.
DAI ensures liquidity for its users through several mechanisms. First, because DAI is a stablecoin with a value pegged to the US dollar, it can be easily exchanged for other cryptocurrencies or fiat currencies.
Additionally, DAI is listed on several cryptocurrency exchanges, including OKX, which provides users access to liquidity in various markets. Finally, the Maker Protocol includes a system of auctions that can be used to buy and sell DAI in the event of extreme market volatility, which helps maintain the token's stability and ensure that users can always access liquidity when they need it.
Unlike other stablecoins backed by fiat currency or commodities, DAI is backed by CDPs on the Ethereum blockchain. This means that DAI's stability is not tied to any centralized authority or external asset, making it a more decentralized and transparent stablecoin option.
Additionally, because the value of DAI is not tied to any specific asset, it can be used in a broader range of applications. As a result, it can be more easily integrated into DeFi ecosystems.
The DAI ecosystem incentivizes stability through a system of penalties and rewards. If the value of DAI falls below its $1 peg, users who hold DAI can vote to increase the stability fee, which increases the cost of creating new DAI and incentivizes users to hold or buy DAI until the price stabilizes. Conversely, if the value of DAI rises above its $1 peg, the stability fee is lowered, incentivizing users to sell DAI and bringing the price back down.
The stability fee is a fee paid by users who generate new DAI through collateralized debt positions (CDPs). The fee incentivizes users to hold or buy DAI when its value falls below the $1 peg.
Suppose the value of DAI falls below $1. In that case, the stability fee is raised, which increases the cost of generating new DAI and incentivizes users to hold or buy existing DAI until the price stabilizes. Conversely, if the value of DAI rises above $1, the stability fee is lowered, incentivizing users to sell DAI and bringing the price back down.
MKR is the native cryptocurrency of the MakerDAO platform, which powers the DAI stablecoin. MKR is used to govern the MakerDAO platform and to vote on changes to the system, such as changes to the stability fee.
Additionally, when users generate new DAI through collateralized debt positions (CDPs), they must pay a small amount of MKR as a transaction fee. The MKR collected from these transaction fees is burned, which reduces the total supply of MKR over time.
The DAI savings rate is an annualized interest rate paid to users who hold DAI in a designated savings account. The DAI savings rate is calculated based on the stability fee, the interest rate charged on collateral deposited in Maker Vaults.
When the stability fee is higher than the DAI savings rate, users are incentivized to hold DAI in the savings account and earn interest rather than using it to generate more DAI. The DAI savings rate can vary over time based on changes to the stability fee and demand for DAI. Holding DAI in the savings account can be a helpful strategy for users who want to earn a return on their assets without exposing themselves to excessive risk.
Dive deeper into DAI
DAI is a decentralized stablecoin designed to maintain a value of one US dollar. It is a product of MakerDAO, a decentralized autonomous organization (DAO) built on the Ethereum blockchain. The project was proposed by Rune Christensen, the founder of MakerDAO, in 2014 to create a stablecoin that was decentralized, transparent, and backed by collateral.
The first version of DAI, called Single-Collateral Dai, was launched in December 2017 and was initially backed only by Ethereum (ETH). Later, the Dai Stablecoin System evolved into a Multi-Collateral Dai system that allows different assets as collateral to back the stablecoin.
DAI has gained popularity as one of the most widely used decentralized stablecoins in the cryptocurrency ecosystem. By being backed by collateral and not pegged to a fiat currency, DAI can maintain its value stability while being transparent and accessible to everyone.
Unlike traditional stablecoins, such as Tether (USDT) and USD Coin (USDC), which are backed by fiat currency reserves, DAI is backed by collateral. Specifically, it is supported by Ethereum and other ERC-20 tokens deposited into a smart contract called a collateralized debt position (CDP).
The value of the collateral is maintained at a minimum of 150% of the value of the DAI that is issued. This ensures that there is always sufficient collateral to back the stablecoin and maintain its stability.
How does DAI work
The technology behind DAI is complex but can be broken down into several key components. The first component of the DAI technology is the CDP smart contract. This smart contract is used to collateralize assets to back the DAI stablecoin. Users can deposit Ethereum and other ERC-20 tokens into a CDP and receive DAI in return.
The value of the collateral is maintained at a minimum of 150% of the value of the DAI that is issued. This ensures that there is always sufficient collateral to back the stablecoin and maintain its stability.
The second component of the DAI technology is the stability mechanism. The stability mechanism is designed to ensure that the price of DAI remains stable at one US dollar. If the price of DAI rises above one US dollar, then the MakerDAO system incentivizes users to create more DAI by lowering the interest rate on CDPs.
If the price of DAI falls below one US dollar, then the MakerDAO system incentivizes users to buy back DAI by raising the interest rate on CDPs. This mechanism ensures that the price of DAI remains stable over time.
The third component of the DAI technology is the governance system. The governance system is used to manage the MakerDAO platform and make decisions about its future. Anyone who holds the DAI governance token can participate in the governance system.
The system is designed to be decentralized and transparent, with voting rights weighted by the amount of DAI each user holds. The governance system is responsible for making decisions about changes to the platform, such as adjusting the stability mechanism or adding new collateral types.
The final component of the DAI technology is the Ethereum blockchain itself. DAI is built on top of the Ethereum blockchain, which provides a secure and decentralized platform for creating and managing the stablecoin. The Ethereum blockchain stores the smart contracts that power the DAI system and executes transactions between users.
What is DAI used for
The DAI stablecoin is used for various purposes in the cryptocurrency ecosystem. One of its most significant use cases is as a medium of exchange. It can be used to buy and sell goods and services like any other currency. Additionally, it can be used as a store of value, as its price stability makes it an attractive alternative to volatile cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
Another critical use case for DAI is accessing decentralized finance (DeFi) applications. DeFi is a new and rapidly growing field that uses blockchain technology to create financial applications that are decentralized, transparent, and accessible to everyone.
Many DeFi applications use DAI as a stablecoin because it offers a stable value that is not subject to the volatility of other cryptocurrencies. As a result, DAI is used in various DeFi applications, including lending, borrowing, and trading.
The DAI token itself is used to govern the MakerDAO platform. Holders of DAI can participate in the MakerDAO governance system, allowing them to vote on proposals and make decisions about the platform's future. The governance system is designed to be decentralized and transparent; anyone can participate by holding DAI tokens.
About the founders
The founders of MakerDAO are Rune Christensen and Andy Milenius.Rune Christensen is the CEO and co-founder of MakerDAO. He has a background in design and entrepreneurship, having previously founded a web development and design agency. Christensen has been the driving force behind the creation of DAI and the MakerDAO platform.
Andy Milenius was the CTO and co-founder of MakerDAO. He has a background in software engineering, having previously worked at Google and several startups. Milenius was responsible for the technical design of the MakerDAO platform, including the development of the smart contracts that power the system. Milenius left the company in 2019.
The MakerDAO team has created a revolutionary stablecoin backed by collateral and designed to maintain a stable value of one US dollar. The team has a deep understanding of blockchain technology and has been working on the concept of a decentralized stablecoin for several years.
The MakerDAO team is highly respected in the blockchain community and has received several awards and accolades. Additionally, the MakerDAO platform has been recognized as one of the world's most innovative and impactful blockchain projects.
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