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Join date: Nov 24, 2022

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Dai Stablecoin, what is it?

At the end of December 2017, Maker released a system for decentralized stablecoin called "Dai." It is an ERC20 token that is pegged to the U.S. dollar. Each Dai is worth $1 and will always be worth that much no matter how long it exists. There is no centralized authority for it, like Tether, that maintains the value, and there is no traditional bank that backs each Dai with real U.S. dollars. There is nothing to shut down, and there is no centralized system to be trusted. Dai is used exclusively on the Ethereum blockchain using smart contracts. Trade crypto only on a reliable platforms like https://redot.com/ with the lowest fees.

- Dai is always worth $1.

- It can be traded freely, just like any ERC20 token.

- Anyone with an Ethereum wallet can own it, receive it, and transfer it.

- It can be exchanged without intermediaries.

- No individual or entity has control over it.

- No government or authority can shut it down.



How the Dai works.

When the Dai is above $1, the mechanisms work to bring the price down. When the price is below $1, the mechanisms work to raise the price. The rational players who participate in these mechanisms do so because they only make money when the token is not worth exactly $1. That's why it's always worth a little more or less than $1 - it's an infinite wave function, oscillating infinitely close to $1, but never reaching it. The more it moves away from $1, the more incentive it has to get closer.


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