One of the key challenges facing investment in cryptocurrency is fluctuation. Cryptocurrencies are becoming so volatile in the market. Due to the volatility trades can't depend on them for exchange. Imagine buying a product of $1200 using cryptocurrency but in a short time, the value of the currency drops to $800.
It is good we understand what is Dai. Dai is a decentralized currency that runs on Ethereum network. This currency is a stable coin that is not by USA bank accounts rather than it is supported by the maker's platform.
Therefore, Dai was introduced to cater for this fluctuation of cryptocurrencies. Dai forms a stable crypto coin that is equivalent to 1$. Since the launch of Dai in 2014. Dai has managed to maintain its value in the currency market.
Uses of Dai
They are many reasons why someone may prefer to use Dai instead of using the US dollar despite both being a stable coin. There are many reasons why people are interested to invest in Dai and make it a currency for exchange. This reason makes it Dai more usable in the market.
Borderless- you can use Dai at any place no matter the country or state that you live in. Dai is unlike Us dollar where you are required to have a bank account. People who do not have to access a bank account.
Protection- Dai can be used to protect your currency in case the is a high fluctuation currency value in your currency. Saving you money as Dai will help you to restore your money value as Dai is as stable currency.
Programmable- Dai is programmable. This means you can program it to fit your personal needs by use of Smartcontracts. For instant, you can programmable them you what to perform transaction as for the case of paying a worker. Unlike other currencies where you have always o travel to the bank to make you payments. Dai makes this easy for you as you do not have to travel to banks.
Easy to transfer- you can send Dai anywhere when every you want. This transfer is always fast taking a short period. Unlike bank accounts that charge high transaction fees at it takes a long time for a transaction to happen.
Fast and cheap- Dai work under the Ethereum network making it easy to transfer that cheap transaction fees. Unlike other stable currencies with a high fee of the transfer.
Decentralized- Dai is a decentralized currency which means you can open a wallet on your mobile phone or even on your computer. You do not need a Bank account to store you Dai.
Transparent transactions- Dai transactions are safe and secure. A transaction is always available for the public to view.
Moreover, Dai will always remain to be a stable coin as it has a lot of assets that support it. These assets are equivalent to many US dollars.
How Dai stays Stable
Dai maintains it is value as no centralized authority that backs Dai value or even a traditional bank. Hence no institution that has the right to relate Dai to US dollars. Dai it's self-independent as it only operates in the Ethereum network.
Incase Dai goes below one dollar. Value is maintained as you will have to send your Dai to a CDP and get back you there at a discount rate to make sure our Dai is equivalent to one dollar. When the value of Dai is greater than 1 US dollar the CDP take such opportunity to refund back the discount it had offered.