Good morning Lion's I trust you are safe and well and roaring into action as markets continue to turn green providing a much needed boost to the sector and many who lost significant ground in 2022.
Today's Leo Learn segment we are focusing on one of the very first Stable coins to be released to the sector and one of the more successful long lasting ones, Dai Coin
DAI is a decentralised, digital currency that is pegged to the US dollar. It was created by MakerDAO, a Decentralised Autonomous Organisation (DAO) on the Ethereum blockchain, in December 2017. The goal of DAI is to provide a stable, decentralised alternative to traditional fiat currencies, allowing users to transact with a currency that has a low level of volatility.
The value of DAI is maintained through a process known as collateralisation which enables users to lock up collateral, such as Ethereum (ETH), in a smart contract to generate DAI.
This collateral serves as a guarantee that the DAI generated will maintain its value relative to the US dollar. If the value of the DAI falls below a certain threshold, the collateral is used to buy and burn DAI, increasing its value.
Since its launch, DAI has become one of the most successful decentralised stablecoins, with a large and active community of users and developers. One of its key strengths is its decentralised nature, as it operates without a central authority controlling its supply or issuing new tokens.
This makes it more resilient to censorship and manipulation than other stablecoins, which are often issued and controlled by centralised entities.
DAI has also been adopted by a number of decentralised finance (DeFi) platforms as a form of collateral and many centralised exchanges now offer interest on holding DAI on their platform. This allows users to access a variety of financial services, such as loans, without having to expose themselves to the volatility of cryptocurrencies like ETH.
DAI has also been successful in achieving its goal of providing a stable form of digital currency. Its value has remained relatively stable since its launch, with only minor fluctuations in response to changes in the value of its underlying collateral. This has made it an attractive alternative to traditional fiat currencies for users who are looking for a more stable and secure form of money.
DAI has established itself as a key player in the DeFi space, offering a stable, decentralised alternative to traditional fiat currencies. With its growing user base and active community, it is likely to continue to play a key role in the development of decentralized finance in the years to come.
image sources provided supplemented by canva pro subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services.
