How does Dai maintain its stability as a stablecoin in the cryptocurrency industry?

1 answers

• Dec 24, 2021 · 3 years ago
  As a stablecoin, Dai maintains its stability in the cryptocurrency industry by leveraging the power of decentralized finance (DeFi). One of the key features of Dai is its ability to be minted and burned based on demand. When the demand for Dai increases, new Dai tokens are minted, and when the demand decreases, Dai tokens are burned. This supply adjustment mechanism helps to keep the price of Dai stable. Additionally, Dai's stability is also supported by its decentralized governance system. The community of Dai holders can vote on important decisions, such as changes to the stability fee or collateral requirements, ensuring that the stability of Dai is maintained through a decentralized and transparent process.
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