๐๐๐ ๐ข๐ฌ๐ญ ๐๐ข๐ง ๐๐ญ๐๐๐ฅ๐๐๐จ๐ข๐ง ๐ ๐๐ ๐๐ง ๐๐๐, ๐๐ฅ๐ฅ๐๐ซ๐๐ข๐ง๐ ๐ฌ ๐จ๐ก๐ง๐ ๐๐๐-๐รผ๐๐ค๐ฅ๐๐ ๐๐ง - unlike Tether or Binance USD. Sound wyld? Let's see if it does.
If you don't know what a stablecoin is, I recommend you read the post by @Europoor
https://app.getquin.com/activity/ZbyIuQLbvP.
The most popular USD stablecoins store one USD for each issued coin in a bank account, which is supposed to ensure that a USD stablecoin can be exchanged for a real USD 1:1 at any time. At least that is what the issuers of these stablecoins claim. You have to trust the statements of a central organization here, which in the best case is controlled by another central organization. To me, this sounds very much like problems (trust in individual players, centralization) that crypto would actually like to replace.
DAI also tries to map the USD exchange rate 1:1, but no USD are bunkered anywhere for this.
๐๐ข๐ ๐๐ฎ๐ง๐ค๐ญ๐ข๐จ๐ง๐ข๐๐ซ๐ญ ๐๐๐ ๐๐๐ง๐ง?
For each DAI generated, other coins / tokens are deposited as so-called collaterals in Vaults. This means that you deposit e.g. ETH as collateral and receive a certain amount of DAI in exchange. If you want your ETH back, you have to pay back the DAI you received and a fee. Originally, only ETH could be deposited as collateral, but now other coins/tokens are also possible. Technically, this is realized via smart contracts.
๐๐ข๐ ๐ฏ๐ข๐๐ฅ ๐๐๐ ๐๐ซ๐ก๐๐ฅ๐ญ๐ ๐ข๐๐ก ๐รผ๐ซ ๐ฆ๐๐ข๐ง ๐๐จ๐ฅ๐ฅ๐๐ญ๐๐ซ๐๐ฅ?
This depends on the USD rate of the collateral deposited as well as the risk associated with the collateral. For example, roughly for 1.5 USD in ETH you get 1 DAI. This is one of several safety mechanisms to prevent the value of the collateral from falling below the value of the issued DAI in the short term due to exchange rate fluctuations. So if an ETH is worth 3,000 USD, you will receive 2,000 DAI for it. Of course, you only have to pay back the 2,000 DAI + fee to redeem your ETH.
๐๐๐ฌ ๐ฉ๐๐ฌ๐ฌ๐ข๐๐ซ๐ญ, ๐ฐ๐๐ง๐ง ๐๐๐ซ ๐๐๐ซ๐ญ ๐ฆ๐๐ข๐ง๐๐ฌ ๐๐จ๐ฅ๐ฅ๐๐ญ๐๐ซ๐๐ฅ๐ฌ ๐ฌ๐ญ๐๐ซ๐ค ๐ฌ๐ข๐ง๐ค๐ญ?
Volatility is nothing unusual in the crypto world, accordingly, it is quite possible that the value of the collateral drops sharply. If necessary, even to such an extent that the value of the generated DAI becomes higher than that of the deposited collateral. To counteract this, the collateral is liquidated at a certain point in time, depending on certain risk parameters such as volatility. The exact process is a bit more complicated, an explanation would go beyond the scope here. Interested parties can find the details here: https://makerdao.com/en/whitepaper/#maker-vaults
๐๐๐ฅ๐๐ก๐ ๐ฐ๐๐ข๐ญ๐๐ซ๐๐ง ๐๐๐๐ก๐๐ง๐ข๐ฌ๐ฆ๐๐ง ๐ ๐ข๐๐ญ ๐๐ฌ, ๐ฎ๐ฆ ๐๐๐ง ๐๐ซ๐๐ข๐ฌ ๐ฌ๐ญ๐๐๐ข๐ฅ ๐๐๐ข ๐๐ข๐ง๐๐ฆ ๐๐๐ ๐ณ๐ฎ ๐ก๐๐ฅ๐ญ๐๐ง?
In addition, there are so-called keepers that automatically sell DAI should the price be above 1 USD or buy should the price be below 1 USD.
๐๐๐ง๐ง ๐ฆ๐๐ง ๐๐๐ ๐๐ฎ๐๐ก ๐จ๐ก๐ง๐ ๐๐๐ฎ๐ฅ๐ญ๐ฌ ๐ฎ๐ง๐ ๐๐จ๐ฅ๐ฅ๐๐ญ๐๐ซ๐๐ฅ (๐๐๐ข ๐๐ซ๐ฒ๐ฉ๐ญ๐จ๐รถ๐ซ๐ฌ๐๐ง) ๐ค๐๐ฎ๐๐๐ง?
If you want to use DAI, e.g. because you consider it more secure than Tether, Binance USD & Co, you can also buy DAI like any other cryptocurrency on crypto exchanges like Binance.
๐๐ง๐ ๐ฐ๐๐ฌ ๐ค๐๐ง๐ง ๐ข๐๐ก ๐ฌ๐จ๐ง๐ฌ๐ญ ๐ง๐จ๐๐ก ๐ฌ๐จ ๐ฆ๐ข๐ญ ๐๐๐ ๐ฆ๐๐๐ก๐๐ง?
Like other stablecoins, DAI can also be used for DeFi. For example, in liquidity pools. Otherwise, you can also leverage your collateral with it. If you have 3,000 USD in ETH and deposit it as collateral, you will receive 2,000 DAI, which you can exchange for 2,000 USD in ETH. You then deposit these again as collateral for 1,333 DAI. You then exchange the 1,333 DAI again for ETH and deposit them again as collateral for 888 DAI, and so on.
๐๐ฌ๐ญ ๐๐๐ ๐๐ฎ๐ฌ ๐๐ฎ๐ซ๐๐ซ ๐๐ข๐๐ก๐ญ ๐๐ข๐ง๐ (๐๐๐ฌ๐ฌ๐๐ซ๐) ๐๐ฅ๐ญ๐๐ซ๐ง๐๐ญ๐ข๐ฏ๐ ๐ณ๐ฎ ๐๐ง๐๐๐ซ๐๐ง ๐๐๐-๐๐ญ๐๐๐ฅ๐๐๐จ๐ข๐ง๐ฌ?
Source + further information: https://makerdao.com/en/whitepaper/#abstract
#stablecoin
#learn
#hebel
#esel
#crypto
