A Simple Introduction to DAI

What is DAI?

  • DAI is a stable coin that is backed by crypto assets
  • Pegged to USD: 1 DAI = 1 USD
  • MakerDAO is a protocal that maintains DAI price stability
  • MakerDAO is built on the Ethereum blockchain
  • Used for: Can borrow DAI for an interest, save DAI to earn interest and trade other crypto for DAI to hedge against volatility
  • To borrow DAI, it can be ETH, BAT or USDC but must deposit 150% of borrowed amount
  • When DAI is returned, you must return the amount borrowed + stability fee and the DAI gets burnt and collateral returned
  • If colleterial crypto such as ETH falls below an X%, the collateral will be automatically liquidated
  • Also DAI will charge a 13% liquidation fee
  • Permissionless, transparent, accessible to anyone, run by the community, trustless (no central bank)

Participants

  • Maker Token Holders: Cast votes on new proposals that come through
  • Liquidity Pools: maintain price stability through arbitrage
  • Oracles: Provide accurate price of Ethereum and the markets

Use Cases

  • Provides equal opportunity to anyone to borrow, save, trade and send money  

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Ricky Young

My belief is that financial freedom can only be achieved through a combination of smart investing and passive income. This is my journey to achieve financial freedom.

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