logo for DAI

Firi launches purchase and sale of DAI with Norwegian kroner

Øyvind Kvanes23/01/2021

Today we have launched our first ERC20-based cryptocurrency on Firi!

We are talking about DAI, a stablecoin on Ethereum and an important part of DeFi (decentralized finance).

DAI has been developed for the purpose of creating a stable value of approximately USD 1.

Why launch DAI?

There are two important reasons why we chose to launch DAI on this day. Firstly, we believe decentralized finance is a highly exciting area, particularly in the Ethereum ecosystem. What sets DAI apart from many other stablecoins is that there are no companies that back DAI by USD. The project is decentralized, and it is the value of Ethereum, which is locked into smart contracts, that backs up the value of DAI.

Graph: The value of DAI is priced in NOK throughout the year

The other important reason we are launching DAI is that we have received feedback from customers wishing to trade USD-backed stablecoins. This year, the NOK exchange rate has fluctuated widely, as shown by the graph above. The volume also shows a strong and increasing interest in DAI during recent months. If you want to protect yourself against falling NOK exchange rates, DAI could be a solution.

How does DAI work?

In simple terms, DAI works by allowing you to send ether to a smart contract that creates DAI and pays out in the form of a loan. Ether that is sent is pledged as collateral for DAI, which you then borrow back. This is comparable to pledging your house as collateral against a bank loan.

It is precisely this that sets apart DAI from other stablecoins. Coins such as USDT and USDC are backed by U.S dollars, while DAI pledges ether as collateral to obtain an "artificial" exchange rate equivalent to USD 1.

New ERC20 tokens

Now that we have integrated a cryptocurrency based on the ERC20 protocol of Ethereum, it should be relatively quick to launch more markets for ERC20 tokens. There are very many exciting projects to choose from, and since it is important for us to launch services that our customers want, we hope for feedback from you regarding the matter. Feel free to get in touch if you have suggestions for projects that you would like to see listed. Feel free to read about how we evaluate new projects here.