Dai Price（DAI）

24h Low & High

What is Dai (DAI)

Dai (DAI) is a decentralized stablecoin on the Ethereum blockchain that is designed to maintain a 1:1 peg with the US dollar. Unlike traditional stablecoins, which are backed by centralised dollar reserves, Dai achieves stability through collateralized crypto assets. It is generated by the Maker Protocol and managed by MakerDAO, a decentralised autonomous organisation (DAO) that is governed by MKR token holders. Launched in 2017 by Danish entrepreneur Rune Christensen, Dai offers individuals and businesses a low-volatility digital asset.

How does Dai work?

Dai’s stability relies on a Collateralized Debt Position (CDP) mechanism. Users lock Ethereum (ETH) or other supported ERC-20 tokens in smart contracts as collateral to generate Dai. For instance, depositing $200 worth of ETH could enable the creation of 100 Dai, with over-collateralization (usually 150% or more) ensuring value stability. If the value of the collateral drops, the system automatically sells some of it to maintain the peg. Repaying Dai burns it, releasing the collateral. Dai’s supply adjusts dynamically based on market demand, with no fixed cap.

Advantages and limitations of Dai

Dai’s strengths include decentralization and stability. As it is free from single-entity control, it offers transparency and trust, making it popular in decentralized finance (DeFi) for lending and payments. As a stablecoin, Dai protects users from crypto market volatility and enables risk reduction during downturns. However, over-collateralization reduces capital efficiency and rapid drops in collateral prices can trigger liquidations, resulting in losses.

How to buy DAI?

The easiest way to buy DAI is through a crypto exchange like BTCC. BTCC makes purchasing DAI easy and accessible whether you use fiat currency or crypto. Trusted by over 9.1 million investors across 100 countries, BTCC is dedicated to offering excellent crypto trading service for all trades. If you’re ready to dive in and make your first DAI purchase, register with BTCC today.