DAI is a very particular stablecoin, as, unlike other solutions such as USD Coin, Tether, PAX, it is completely decentralized.

All of the appearances may seem paradoxical that a stablecoin can be decentralized, since it requires one or more entities that manage the reserve funds of the currency.

The decentralized DAI stablecoin, announced in December 2017 by MakerDAO, is a stablecoin defined without trust, since there is no organization or central that manages the funds.

DAI, in fact, is the support for the ethereum blockchain and was created with a sophisticated incentive mechanism that provided its value anchored to the figure of one dollar despite the reserve funds set up by ethereum.

Consequently, there is no bank account with funds in FIAT currency, but an incentive mechanism coded in the smart contracts on ethereum and some tokens (MKR, WETH and PETH) managed within the oracles.

This mechanism has always managed to keep the value of DAI close to one dollar, despite the fact that in the last 18 months ethereum has gone from 400 to 1200 dollars, to then go down again around 120 dollars and now to 250 dollars.

You can learn more about the complicated functioning of DAI in our dedicated article. It is therefore a rather particular structure which, however, has unfortunately had little media attention during its existence.

The debut on the Coinbase platform, which has always been considered the gateway to the world of cryptography for newbies, could encourage the abuse and adoption of DAI.