Review on Dai by Fanuel PORPORTY
Multi-collateral DAI (DAI) is a cryptocurrency token and operates on the Ethereum platform. Multi-Collateral Dai, brings a lot of new and exciting features, such as support for new CDP collateral types and Dai Savings Rate.
With the addition of BAT as collateral, MakerDAO isn't just for ETH holders.
MakerDAO users can finally stake multiple cryptocurrencies to back the Dai stablecoin. Multi-Collateral Dai went live with support for Brave’s Basic Attention Token. Additionally, the upgrade continues support for Ethereum-based collateral. Other tokens, including Augur, 0x, USDC etc...may be on the way as well. Multi-Collateral Dai also has a few secondary features. Most notably, it coincides with the Dai Savings Rate, which draws funds from the project’s stability fee in order to pay returns to users. Today’s upgrade also allows users to pay their stability fee with Dai rather than the less commonly held MKR governance token.
Unlike Tether and most other stablecoins, Dai is not backed by a central reserve of fiat currency. Instead, individual users lock up their crypto holdings in a blockchain smart contract, allowing them to issue their own Dai. It’s an original model, and with any luck, these new features will attract more users to the platform.
Pros
- DAI is easily transferable, transparent, and secure given its issuance on Ethereum blockchain. As an ERC20 DAI can be stored in personal hardware wallets where users maintain ownership over the private keys.
- DAI is governed by smart contracts and therefore is the only stablecoin that cannot be seized or censored by governments or regulatory agencies.
- DAI is collateralised by Ethereum, Basic attention Token, Augur, 0x which is unchangingly verifiable on the Ethereum blockchain.
- Transacting with DAI does not require any account creation or KYC processes. It is by far the most private stablecoin available.
Cons
- DAI is only listed on a few major exchanges and does not have nearly as many trading pairs compared to centralized stablecoins such as USDT and USDC.
- DAI is exposed to greater price fluctuations in USD compared to centralized stable parts due to its guarantee by volatile assets in Ethereum.
