DAI Price Today

The current real-time DAI price is $1.00 . DAI price has plummeted by 0.05% in the last day and decreased by 0.03% in the last seven days. It’s important to note that the current DAI market capitalization is $5,347,300,194. The maximum supply is coins, with a circulating supply of 5,347,888,595.75. DAI is ranked #19 in terms of market cap.

The Basics of DAI 

DAI is a stablecoin created by a crypto-loans-focused project, Maker Protocol. The DAI stablecoin launched in 2017 as a volatility-resistant lending asset but found popularity outside of the Maker ecosystem. Instead of being controlled by a central authority, like Tether and USD Coin, Maker handed off control over to the Decentralized Autonomous Organization (DAO) MakerDAO.

It's important to understand that DAI is a multi-collateral stablecoin, meaning that it's collateralized by several crypto assets instead of just USD or a single cryptocurrency. The stablecoin is pegged to the US dollar and is therefore used as a store of value by people wishing to park money in cryptocurrency without having the associated volatility exposure.

A substantial portion of demand for DAI is driven by the search for a trustless stablecoin that isn't controlled by a central authority. As a DAO operates DAI, people consider the asset safe and that it has the community's best interests at heart. Moreover, DAI is used within Maker's crypto loans ecosystem, giving it additional value outside its purpose as a stablecoin. 

This Is How DAI Works

DAI is built on the Ethereum network, uses ETH to fund transaction fees, and benefits from its decentralization, security, and scalability. However, the asset is also available on other networks, including Arbitrum and Polygon, where settlement times and average fees differ. 

People who hold wealth in DAI tokens can increase their holdings through the DAI Savings Rate (DSR) program, which gives users the ability to earn up to 7% yield paid in DAI. Alternatively, people can borrow DAI from Maker's Spark by pledging Ethereum as collateral. Borrowers have to pay an interest rate of 8%, partially offsetting rewards payouts. 

As an ERC-20 token, DAI will cost around 65,000 gwei to transfer, and transaction settlement will take around 10 minutes to an hour. That said, Polygon and Arbitrum DAI transactions will be slightly cheaper and should be confirmed more quickly. 

How DAI Maintains Its USD Peg

DAI maintains its USD peg by locking cryptocurrency in smart contracts. Instead of using a cash reserve or algorithmic balancing, DAI is backed by debt from collateralized loans. 

People can lock Ethereum in a smart contract to generate DAI and receive a loan. To get their Ethereum back, the borrower must return the DAI and pay a fee. If ETH falls in value, the contract will automatically sell it to cover the value of the DAI loan.

Due to how DAI's peg is maintained, there should always be ample collateral to cover any redemptions. People cannot mint DAI without locking an equivalent amount of ETH in a smart contract. Moreover, as the smart contract system is decentralized and can automatically respond to market movements, it cannot be altered by anyone, improving security. 

DAI Versus Other Stablecoins 

DAI is unique in its approach to the stablecoin market. The asset is governed entirely by a decentralized autonomous organization and uses the custom method of crypto loan collateral to maintain its peg. Due to being based on smart contracts, DAI should always be over-collateralized and cannot be changed by a single authority, eliminating transparency or balancing issues.

Two of the world's most popular stablecoins are Tether (USDT) and USD Coin (USDC). Both of these stablecoins have a market capitalization many times that of DAI, but each has faced troubles in the past. 

• Tether – Tether is the world's most used stablecoin. It has never lost its peg in a substantial way, but it has faced regulatory and transparency-related problems.
• USDC – USD Coin is a highly transparent stablecoin that has not faced any legal troubles. However, USDC has experienced a few significant de-pegging incidents.