DAI: The Decentralized Stablecoin Explained

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DAI Price Today

Market Overview

Supply Metrics


DAI (DAI) to USD Chart

The real-time DAI price is $1.00**, maintaining a stable peg to the USD. Over the past week, DAI saw a minor increase of **0.02%**. With a market cap of **$5.37B, DAI ranks #23 among cryptocurrencies.

👉 Discover how DAI compares to other stablecoins


The Basics of DAI

DAI is a decentralized stablecoin launched in 2017 by Maker Protocol. Unlike centralized stablecoins like Tether (USDT) or USD Coin (USDC), DAI is governed by MakerDAO, a Decentralized Autonomous Organization (DAO). Key features:


How DAI Works

  1. Ethereum Foundation: DAI runs on Ethereum (ERC-20) but is also available on Layer 2 networks like Arbitrum and Polygon for lower fees.
  2. Collateralized Loans: Users lock ETH in smart contracts to mint DAI, which must be repaid to reclaim collateral.
  3. Yield Opportunities: The DAI Savings Rate (DSR) offers up to 7% APY for stakers.

👉 Learn about earning with DAI Savings Rate


Maintaining the USD Peg

DAI’s stability relies on over-collateralization:

Advantage: Eliminates reliance on centralized reserves (unlike USDT/USDC).


DAI vs. Other Stablecoins

| Feature | DAI | USDT | USDC |
|--------------|----------------|----------------|----------------|
| Backing | Crypto-collateral | Fiat reserves | Fiat reserves |
| Governance | DAO | Centralized | Centralized |
| Transparency | High | Controversial | High |
| Peg Stability | Strong | Strong | Occasional dips |

Why DAI Stands Out:


FAQ

1. Is DAI truly decentralized?

Yes! DAI is managed by MakerDAO, a community-led DAO, with no corporate control.

2. How is DAI’s peg maintained during market crashes?

Smart contracts automatically liquidate undercollateralized loans, ensuring DAI remains fully backed.

3. Can I earn interest on DAI?

Absolutely. The DAI Savings Rate (DSR) offers yields up to 7% for depositors.

4. What networks support DAI?

Ethereum (mainnet), Arbitrum, Polygon, and other EVM-compatible chains.

5. Why choose DAI over USDT/USDC?

For censorship resistance and transparency—DAI isn’t tied to traditional banking systems.


Final Thoughts

DAI redefines stability in crypto with its decentralized, over-collateralized model. Whether you’re hedging volatility or earning yield, DAI offers a trustless alternative to fiat-backed stablecoins.

Pro Tip: Use DAI for DeFi lending/borrowing to avoid liquidation risks common with volatile assets.