DAI is a Stablecoin created on the Ethereum network in 2017 by Rune Christensen, creator of the MakerDAO platform (Decentralized Autonomous Organization), which operates without intermediaries. The platform allows users to participate in making decisions in development and changes if they own the assets of the network.
DAI is one of the most well-known and accepted stablecoins. DAI is equivalent to the US dollar at a rate of 1:1 and is the 4th largest stablecoin in the world according to market capitalization.
DAI is an Algorithmic Stablecoin that does not peg itself with fiat currencies or commodities to maintain price stability, but the price of DAI is regulated through Smart Contract with the mechanism of increasing or decreasing the number of coins to create a stable price.
In general, digital assets or cryptocurrencies are classified as assets with relatively high price volatility, including Bitcoin, which can fluctuate up to or over 20% per day. On the other hand, stablecoins can attract investors who prefer low-risk investments as well as new investors to the world of cryptocurrencies.
Moreover, DAI is a stablecoin with a wide range of practical applications, such as topping up debit cards or receiving donations for France’s UNICEF.
DAI was developed by the Maker Platform to allow users to exchange cryptocurrencies to DAI at times of high market volatility through the Oasis Vault, which brings coins that are accepted by the Ethereum network as an exchanged asset for DAI. However, this is performed with a higher exchange rate to cover price fluctuations. However, each cryptocurrency will have a different exchange rate.
DAI holders can also deposit their coins in the Oasis Vault for rewards. In the future, users can lend DAI through DAI Wallet on a DeFi (Decentralized Finance) platform like Compound and Aave.
The platform’s DAO (Decentralized Autonomous Organization) is also an integral factor as it is not operated by any central authority or company. It is managed and controlled by the users holding the coin which gives neutral and effective development in accordance with democratic principles.
When users are involved in the managing and maintenance of the network. This makes it a great security enhancement through users' eyes, where they collaborate to monitor smart contract or working mechanism irregularities to ensure stability and efficiency at the same time
In reference to statistics from Coinmarketcap on October 14, 2021, DAI is ranked as the 31st highest in terms of market capitalization, with around 6.48 billion U.S. dollars or around 215 trillion Thai baht. DAI’s maximum supply is fixed at 6,474,952,202 DAI with a current 6.4 billion DAI in circulation. Additionally, DAI once made an all-time high at 38.68 baht and is hovering around the price of 33.22 baht at the time of writing.