What is DAI?

Dai is a decentralized cryptocurrency stabilized against the value of the US dollar. Created via the Makers (MKR) Dai Stablecoin System, it uses margin trading to respond to changing market conditions and preserve its value against the major world currencies. Unlike other popular stablecoins whose value is backed directly by USD, it’s backed by crypto collaterals that can be viewed publicly on the Ethereum blockchain.

Who Invented DAI?

DAI is a product of MakerDAO, which was founded by Rune Christensen, the current CEO.

How is DAI produced?

DAI is created whenever someone takes out a loan on MakerDAO. DAI is destroyed when loans are paid back.

How do you get hold of DAI tokens?

The most direct way to get DAI is by taking out a loan on MakerDAO’s Oasis platform. You can also trade DAI on that same platform or use a centralized exchange such as Coinbase.

Since DAI is simply a token on Ethereum, anybody can use or build with DAI without permission. As an ERC20 token, DAI functions as a building block that can be incorporated into any decentralized application (dapp) needing a stable asset or payment system.

Developers can also wrap DAI in different smart contracts and modify it for different uses. For example, xDAI takes DAI and puts it on a superfast and low-cost sidechain to make transfers and payments easier and more efficient. Chai and rDAI takes normal DAI, puts it in an interest-generating pool, and lets users control what happens to the interest as it accumulates.