About Multi-collateral DAI
Dai is a decentralized cryptocurrency stabilized versus the value of the United States dollar. Created by means of the Makers (MKR) Dai Stablecoin System, it utilizes margin trading to respond to changing market conditions and maintain its value against the major world currencies. Unlike other popular stablecoins whose worth is backed straight by USD, it's backed by crypto collaterals that can be viewed openly on the Ethereum blockchain.
What Is DAI?
In other words, Dai is a decentralized stablecoin produced by MakerDAO (MKR). One Dai equates to one US dollar (1:1 ratio) and will constantly stay so till the token is secured of the flow.
Dai preserves steady value without central trust in a creative and intriguing method. It moves following market modifications and therefore keeps a steady price against other cryptocurrencies. The process is helped with by the Maker platform together with the MKR token, CDP clever contracts, and several other stabilization mechanisms. There is no requirement for a central authority that supervises fiat-collateralized stablecoins like Tether (USDT), nor any conventional bank backs it. The task lives entirely on the Ethereum blockchain and its smart agreements, and that makes Dai a really trustless and decentralized stablecoin which can not be shut down nor censored.
How Is Dai Developed?
As a crypto-collateralized stablecoin, Dai is collateralized with Ether. Any Ether holder can develop Dai utilizing MakerDAO DApp.
Initially, you need to send your Ether to a collateralized financial obligation position (CDP). In turn, you would get a part of Dai. A CDP is a smart contract which works on the blockchain and governs the issuance and redemption of Dai. After you receive Dai for your ETH, the only method to get your Ether back is to repay the obtained DAI.
The Collateralized Debt Position (CDP) is a monetary cryptocurrency principle that has been in advancement since 2014 by the MakerDAO task, which uses a possible option to the high volatility that cryptocurrency deals with today through the stablecoin called Dai.
More information can be found at http://www.makerdao.com/.