
Important facts about DAI
- DAI is technically an Ethereum-based application built on the Ethereum blockchain.
- DAI always falls under the category of stable cryptocurrencies, also known as stack coins. A stable cryptocurrency, or stablecoin, is a cryptocurrency that is linked to another stable asset class such as the dollar, pound or gold.
- Because DAI is a cryptocurrency created on the Ethereum blockchain, DAI can be stored and transferred directly to anyone, anywhere in the world, without going through third parties such as banks or other central institutions.There are a number of other stable cryptocurrencies that have a stable 1: 1 value pegged to a US dollar. The most well-known stable cryptocurrency is Tether. Tether has a reserve of actual US dollars, bonds and other securities that will "back up" every single unit of tether that exists, and is controlled by a centralized organization. USDC (US Dollar Coin) is also a very well known stack coin and works in the same way. You can see an overview of different stack coins here. Du kan se en oversikt over ulike stablecoins her.
- Unlike Tether and the majority of other major stable cryptocurrencies, DAI is decentralized, which means that no centralized organization controls the supply of new DAIs in circulation.
- Because the crypto market can be volatile, it is common to use DAI to protect against market fluctuations.
- DAI is also widely used in services that offer decentralized loans and interest-bearing funds.