Review on Dai by Azad Aliyev

What is Dai Coin?

Have you heard of the Dai stablecoin and wondered how it works? In this article, I will examine how it works and why I believe it is one of the most important cryptocurrencies. I will also show you how to buy it and how to store it safely.

Dai is a stablecoin. It aims to be worth 1 usd. So 1 usd = 1 dai. What is unique about Dai is that it is completely decentralized and uses smart contracts to maintain its stability.

It is perfect as a currency, as the dai will always be worth around 1 usd. You don't have to worry about spending your Dai just to increase its value in the future. One of the main reasons Bitcoin is such a good store of wealth is because there is a belief that its value will increase. A lot of people don't spend. But with Dai you are free to spend it and use it as currency.

There are over 1.8 Billion people worldwide who do not have access to a bank. This allows these people to have some sort of value without having to have a bank account. Since it is decentralized, you can store Dai yourself in a wallet and no one can close or block that wallet. It is always yours.

Protection Against Hyper Inflation

Hyperinflation is caused by the government printing so much money that it basically becomes worthless. It is currently happening in countries all over the world. In these countries, people can't even buy a loaf of bread without having to carry bags of cash.

Dai can help prevent this. It is worth about 1 US Dollar. And it will be worth $1 in the future. So you can use it to store value and protect yourself against hyperinflation.

programmable

For example, if you have to pay a lot of people every day, you can write a simple script to have them do it for you. And because Dai is not decentralized, you can send Dai anytime any day of the week. It doesn't matter if it's a bank holiday or a Sunday, Dai will always work.

Cheap and Easy to Ship

You can send Dai anywhere in the world in minutes. And it will only cost a few cents. International wire transfers can take days to complete and cost $10.

What Kind of Stablecoin Is Dai?

How does Dai become a stable cryptocurrency? For every Dai there is at least $1 worth of crypto backing it. Unlike other stable coins that rely on a collateral holding company, Dai uses smart contracts to handle the entire process. There is no single company that controls Dai.

So how does it work? A user opens what is called CDP (Assured Dept Position) with Maker. This user deposits ETH or other crypto in CDP and earns Dai in return depending on the rate. User can claim back Ethereum but deposit Dai. And the amount of ETH they will get back is determined by a ratio. These rates help keep the price of Dai at $1 USD. Simple economics and math.

As a Dai user, you don't have to worry about how this works. You can buy Dai on any exchange and know it will be worth close to $1 in the future.