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Bored Ape Crypto Club
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DAI is a stablecoin that runs on the Ethereum blockchain, as well as other networks (Arbitrum, Polygon, Avalanche, Optimism, etc.)
The main goal of DAI, like any other stablecoin, is to maintain a 1:1 peg to the US dollar. A unique feature of DAI is that it is decentralized and managed by MakerDAO. Unlike USDT and USDC, which are centralized stablecoins issued by companies, DAI can be issued by users themselves.
DAI is issued by providing collateral in a smart contract. The collateral ensures the stability of DAI and acts as a guarantee of its value. Compared to USDT and USDC, which are backed by US dollar reserves owned by issuing companies, DAI boasts greater transparency and sustainability.
Another key difference is that USDT and USDC are pegged to the US dollar via collateral in the issuers’ bank accounts. DAI’s peg is maintained algorithmically. If the price of DAI deviates from the $1 target, the system uses modifications such as raising or lowering interest rates to incentivize users to either create or burn DAI. This adjusts supply to match demand and brings the price back to $1.
Moreover, the DAI stablecoin does not have a freeze function, unlike USDC and USDT. This means that DAI cannot be frozen in your wallet in any way.
Features of the DAI stablecoin:
Decentralized stablecoin without a freeze function;
Anyone can issue DAI by collateralizing ETH, WBTC, and other crypto assets;
The peg to the dollar is maintained algorithmically;
DAI can be burned at any time and your assets can be withdrawn from the collateral;
Tightly integrated into many DeFi tools;
The main goal of DAI, like any other stablecoin, is to maintain a 1:1 peg to the US dollar. A unique feature of DAI is that it is decentralized and managed by MakerDAO. Unlike USDT and USDC, which are centralized stablecoins issued by companies, DAI can be issued by users themselves.
DAI is issued by providing collateral in a smart contract. The collateral ensures the stability of DAI and acts as a guarantee of its value. Compared to USDT and USDC, which are backed by US dollar reserves owned by issuing companies, DAI boasts greater transparency and sustainability.
Another key difference is that USDT and USDC are pegged to the US dollar via collateral in the issuers’ bank accounts. DAI’s peg is maintained algorithmically. If the price of DAI deviates from the $1 target, the system uses modifications such as raising or lowering interest rates to incentivize users to either create or burn DAI. This adjusts supply to match demand and brings the price back to $1.
Moreover, the DAI stablecoin does not have a freeze function, unlike USDC and USDT. This means that DAI cannot be frozen in your wallet in any way.
Features of the DAI stablecoin:
Decentralized stablecoin without a freeze function; Anyone can issue DAI by collateralizing ETH, WBTC, and other crypto assets; The peg to the dollar is maintained algorithmically; DAI can be burned at any time and your assets can be withdrawn from the collateral; Tightly integrated into many DeFi tools;