$1.00

DAI is a stablecoin on the Ethereum blockchain, with its value designed to stay close to the U.S. dollar. It is issued and managed through the Maker Protocol and MakerDAO, a decentralized autonomous organization. To create new DAI, users deposit other cryptocurrencies as collateral into smart-contract vaults. There are two versions: Multi-Collateral DAI and Single-Collateral DAI (SAI). SAI, the earlier version, only accepted one type of collateral and lacked the DAI Savings Rate feature that allows holders to earn interest. Multi-Collateral DAI was introduced in November 2019.

DAI was not created by a single individual or small group. Instead, its development is overseen by MakerDAO and the Maker Protocol. MakerDAO is a decentralized autonomous organization that operates through smart contracts on the Ethereum blockchain. Governance is carried out by holders of Maker (MKR) tokens, who vote on decisions affecting the system, with voting power proportional to their MKR holdings. The organization was originally founded by Rune Christensen, a Danish entrepreneur, in 2015. Before starting Maker, Christensen studied biochemistry and international business in Copenhagen and founded the recruiting firm Try China.

DAI is generated by locking up other cryptocurrencies as collateral in Maker Vaults, which are part of the Maker Protocol. Users can interact with the protocol through platforms like Oasis Borrow or other community-built interfaces. The collateral can include assets such as ETH, WBTC, LINK, UNI, YFI, MANA, and MATIC. After depositing collateral, users can borrow DAI against it, as long as the loan maintains a collateralization ratio between 101% and 175%, depending on the risk of the asset. This process ensures that each DAI is backed by sufficient collateral.

DAI's key feature is its stable price, soft-pegged to the U.S. dollar. In the volatile crypto market, stablecoins like DAI offer a way to hedge against price swings. Unlike stablecoins managed by private companies, DAI is governed by a decentralized autonomous organization through smart contracts on Ethereum. This makes the issuance and burning of tokens transparent and publicly recorded. Additionally, the development of the DAI software is decided through democratic voting by MKR holders, which adds a layer of decentralization and reduces the risk of corruption.

DAI is not created through mining or by a centralized entity. Instead, new DAI tokens are minted by users through the Maker Protocol on Ethereum. To maintain its dollar peg, the protocol requires that each DAI is backed by collateral. Users deposit cryptocurrencies into vaults and can mint new DAI based on the value of that collateral. There is no fixed maximum supply; the total amount of DAI in circulation adjusts dynamically based on the collateral locked in vaults. As of November 2020, approximately 940 million DAI were in circulation.

DAI is an ERC-20 token on the Ethereum blockchain, so its security is tied to Ethereum's underlying consensus mechanism. It is secured by Ethereum's Ethash proof-of-work algorithm, which protects the network from attacks and ensures the integrity of transactions.

You can purchase DAI on a variety of platforms. For decentralized finance (DeFi) users, token swap protocols like Uniswap and Compound allow for direct trading. Additionally, traditional cryptocurrency exchanges such as Coinbase Pro, Binance, OKEx, and HitBTC list DAI, making it accessible to a broad range of investors.