DAI Price Stats
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Market Cap: $6,131,610,945
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Circulating Supply: 6,119,926,282
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Supply Cap: 6,119,926,282
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All-Time High: $1.22 -17.8% March 13, 2020
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All-Time Low: $0.903243 10.9% November 25, 2019
A Brief History of DAI
DAI is a crypto asset that that is built on the Ethereum blockchain. It maintains a stable 1:1 value with the U.S. dollar by locking other crypto assets in contracts. It was launched in December 2017 and its price today is $1.00. There is a circulating supply of 6.1 Billion DAI coins and a total supply of 6.12 Billion. For DAI to maintain a stable value of $1, the Maker protocol implements game theory. The protocol smartly maintains and balances the economic incentives to constantly keep the value of Dai near $1.
Whenever the value of Dai goes below $1, the protocol incentivizes users to increase the price. On the contrary, if and when the value of Dai goes above $1, the incentives work the other way around.
The DAI Team
One of the defining features of DAI is that it wasn’t created by any single person or a small group of co-founders. Instead, the development of the software that powers it and the issuance of new tokens is governed by the MakerDAO and Maker Protocol.
MakerDAO was first introduced in 2015 by CEO-founder Rune Christensen, and the Maker Protocol architecture underlying the DAI stable coin was launched in December 2017.
Advantages of DAI
- Backed by the US Dollar, which means that DAI remains stable if the value of USD remains stable
- DAI makes international trade easier and more cost-effective.
- The supply of DAI cannot be altered by any party in the network, which offers complete transparency and security.
- Transparent, secure, and transferable within the Ethereum ecosystem.
Disadvantages of DAI
- Backed by a depreciating US dollar, which means DAI purchasing power diminishes like the US dollar over time.
- The slow global de-dollarization process will make DAI less saleable.
- Its crypto-collateralized Dai can fluctuate.
- There is a lot of competition amongst various stable coins.
- DAI cannot be mined.
Use Cases of DAI
- Hedge against volatility: Perhaps, the most popular use case of the DAI is to hedge against crypto market volatility (i.e. the price instability of regular digital currencies). Cryptocurrencies like Bitcoin and Ethereum are known for their ever-fluctuating prices.
- Lending: Another major use case of the DAI is its lending functionality. Investment in cryptos for regular traders simply means holding certain digital assets in hopes that they appreciate over a period of time. However, we live in a world of uncertainties. One could need to tend to other financial responsibilities requiring that a user liquidates their position prematurely.
- Medium of exchange: With DAI having solved price volatility issues in the world of cryptocurrencies, it presents itself as a convenient, fast, and low-cost remittance medium of exchange. Although cryptocurrencies have not attained widespread usage like most national fiat currencies, DAI can be used for overseas payment transactions in a peer-to-peer manner as well as a payment method for goods and services – regardless of the transaction volume.
Summary
Dai is a stablecoin cryptocurrency on the Ethereum blockchain. It aims to keep its value as close to one United States dollar as possible through a system of smart contracts and the decentralized participants that those contracts incentivize to perform maintenance and governance functions.
Sources:
https://www.coinbase.com/price/dai
DAI Reviewed
https://cryptowallet.com/academy/dai-use-case/
