Every day is a learning day at the Discord channel that belongs to Hodlnaut. Today, I found the opportunity to ask why DAI was perceived less favourably than USDT and USDC even though they are all stablecoins. This could impact my decision-making because DAI currently yields less interest than both USDT and USDC on the Hodlnaut platform. 

Enthusiastic crypto aficionados were quick to enlighten me that DAI is only soft-pegged to USD as ETH and other cryptocurrencies are used as collaterals. This is unlike USDC and USDT, which are (allegedly) pegged to the American dollar, which must carry some element of truth as we can see how resilient their prices have been during this current market crash. Back to DAI, obviously with crypto being such a volatile asset, the cryptocurrencies that are used to back it will fluctuate like a rollercoaster ride gone berserk during market downturns and hence, do not support DAI as well as the American dollar.

Also, I am gonna come across as ignorant when I say this but I didn’t know that DAI is a decentralised stablecoin, unlike the other two. So apparently, DAI was created by MakerDAO. Dai is minted everytime people lock up Eth or other assets in the Maker protocol. 

I have long heard of the MakerDAO but didn’t recognise that it is the decentralized autonomous organisation that is behind DAI.

I know that this article isn’t much but considering the fact that I learnt all this from the Discord channel by chatting with fellow users, I’m sure you will agree that social engagement is the best way to learn stuff!