Dai (DAI) is a decentralized stablecoin that enables businesses and consumers to leverage blockchain technology for digital payments. DAI is a price-stable cryptocurrency pegged to the US dollar and governed by the decentralized community within the Maker Protocol, the issuer of the DAI stablecoin.

As of June 2022, Dai has integrated with over 400 dApps, digital wallets, DeFi protocols, blockchain-based games, and other services. It is one of the pioneering stablecoins in the crypto market, with the project launching in 2014.

DAI is an Ethereum-based, fully collateralized decentralized stablecoin overseen by MakerDAO, one of the earliest decentralized autonomous organizations in the crypto and blockchain space. Maker envisioned Dai as a price-stable digital asset suitable for lending and digital payments, free from the inherent volatility of cryptocurrencies.

By utilizing smart contracts, DAI offers a faster and more cost-effective method for global payments on the Ethereum blockchain. Adopters of the Dai stablecoin can embrace cryptocurrencies without concerns about market volatility and significant price fluctuations, which have hindered mainstream adoption of crypto assets for payments.

The governance of the Dai stablecoin and MakerDAO is carried out by MKR token holders. These token holders form the decentralized autonomous organization (DAO) of the Maker Protocol, managing the policy that maintains the price stability mechanism of the DAI coin.

Their responsibilities include selecting new types of collateral and participating in governance by voting on new proposals within the community. Established in 2014, MakerDAO is one of the oldest and most successful DAOs on the Ethereum blockchain.

Each circulating DAI crypto is backed by excess collateral to mitigate extreme volatility in the crypto market. This fully collateralized mechanism ensures that the DAI price remains pegged to the US dollar, regardless of market conditions.

In addition, Maker has ensured complete transparency in all transactions related to Dai to enhance investor confidence in the digital asset. The deposits backing the DAI price are held in Maker Vaults on the Maker Protocol, powered by smart contracts. The types of assets accepted by these Maker Vaults are determined through voting by MKR token holders, the governance token of the MakerDAO.

Users generate Dai when Maker accepts additional collateral in the form of Ethereum-based assets approved by MKR holders. Maker Vaults are non-custodial, giving users independent control over the assets they deposit as collateral, as long as their value remains above a minimum threshold level.

The Dai stablecoin offers a wide range of use cases, including:

Facilitating Digital Payments

Dai can be used for seamless online payments worldwide. With the efficiency of the Ethereum blockchain, transactions in Dai are faster and cheaper compared to traditional methods.

Storing Value

As a stablecoin pegged to the US dollar, Dai experiences minimal price fluctuations. Users can securely store their capital on the blockchain and access it from anywhere using a digital wallet.

Purchasing Goods and Services

Dai can be used to buy products and services from online and offline businesses. Many companies accept Dai as a payment option due to its stability compared to volatile cryptocurrencies like Bitcoin and Ethereum.

Trading and Holding

Dai is a valuable asset for trading against other cryptocurrencies or holding for the long term. Its price stability makes it a useful base currency for trading and a secure way to store trading capital.

Earning Passive Income

By depositing Dai on DeFi platforms and providing liquidity, users can earn attractive returns and grow their assets over time. This is an excellent option for long-term holders of Dai. It is important to stay updated on the latest Dai savings rate before utilizing such services.

Dai is a highly secure cryptocurrency that can be a valuable addition to your investment portfolio. If you are seeking a reliable entry point into the crypto market or exploring digital assets as a payment method, consider including Dai.

With its substantial market cap, trading volume, and liquidity, DAI ranks among the top stablecoins in the crypto market. Unlike some of its counterparts, DAI is backed by additional collateral, making it a dependable stablecoin that maintains its peg to the US dollar even during extreme market volatility.

Thanks to the decentralized autonomous organization, MakerDAO, DAI's price remains closely tied to the USD, offering stability and predictability. Investing in DAI allows you to diversify your crypto capital and hold a portion of your investment in a price-stable asset.

If you are searching for a low-risk method to earn returns from cryptocurrencies, investing in DAI tokens is an excellent option. By holding DAI and lending liquidity, you can generate passive income and grow your crypto holdings more securely, with lower exposure compared to actively trading the market.

Created in 2014, the Maker Protocol laid the foundation for MakerDAO in 2015. During this time, the CEO and founder of the project, Rune Christensen, proposed the concept of the Dai stablecoin, initially known as the eDollar.

In December 2017, around two years after its inception, MakerDAO was launched. What distinguishes DAI markets from other stablecoins is that they are backed by collateral in the form of multiple assets, rather than a single type of asset.

In November 2019, Maker renamed the original Dai stablecoin to Sai to pave the way for Dai v2.0. While both Sai and Dai are ERC-20 tokens built on Ethereum, the new DAI became a multi-collateral backed stablecoin, while the previous version remained a single-collateral backed digital asset.

Dai v1.0, also known as Sai, is backed by a single type of asset as collateral. In contrast, Dai v2.0 or DAI is backed by multiple types of collateral stored and managed in Maker Vaults.

The new ERC-20 token Dai v2.0 or DAI was announced in October 2019 and released a month later. Maker provided a migration tool for SAI holders to transition to the new stablecoin. DAI offers enhanced flexibility in managing its price stability mechanism compared to SAI.

This allows Dai v2.0 to increase its circulating supply faster, making it more responsive to the growing demand for the stablecoin in the market.

Another significant difference is that Sai, the single-collateral Dai (SCD), utilized Collateralized Debt Positions (CDPs) to manage the collateral backing the stablecoin. On the other hand, the multi-collateral Dai (MCD) uses Maker Vaults to manage the various assets that serve as collateral for DAI or Dai v2.0 crypto asset.

You can stake Dai (DAI) on various DeFi platforms to earn attractive returns. Before staking your Dai stablecoins, it is important to research and choose a platform that offers the best rewards and security.

Follow these steps to stake Dai and generate passive income:

1. Create an account on a DeFi platform that supports Dai staking.
2. Purchase Dai from a cryptocurrency exchange, DEX, or wallet like BYDFi.
3. Transfer your purchased Dai to the DeFi protocol where you have an account.
4. Go to the staking section and select Dai as the staking option.
5. Check the offered APYs and enter the amount of Dai you want to stake.
6. Review all transaction details, including payout frequency, before proceeding.
7. Click on the Stake button to lock up your Dai tokens on the platform.
8. Periodically redeem your rewards to safely grow your Dai holdings.