$DAI secures its position as the third-largest #stablecoin after a massive $95 million burn of $BUSD.
As you might already know, the new #BUSD. will not be minting due to recent legal regulations
What is $DAI stablecoin and how it is different from others?
DAI is a decentralized stablecoin that operates on the Ethereum blockchain. It is designed to maintain a stable value of approximately 1 USD. Unlike traditional stablecoins that are backed by fiat currency reserves, DAI achieves its stability through a system of smart contracts and collateralization.
The key features of DAI include:
Decentralization: DAI is governed by a decentralized autonomous organization (DAO) called #MakerDAO. This means that its operations and decisions are made collectively by the community of participants, rather than being controlled by a central authority.
Collateralization: To create DAI, users lock up other cryptocurrencies, primarily Ethereum (ETH), as collateral. The collateral is held in a smart contract and is subject to over-collateralization, meaning that the value of the collateral must exceed the value of the DAI issued. This collateralization provides stability and acts as a buffer against price fluctuations.
Stability Mechanisms: In order to maintain its peg to the US dollar, the MakerDAO system uses various stability mechanisms. These include automated feedback mechanisms that adjust the supply and demand of DAI, as well as incentivize users to take actions that help stabilize the price.
Transparency: DAI is built on a public #blockchain, providing transparency and audibility. Users can verify the collateral backing each issued DAI and monitor the operations of the MakerDAO system.
The DAI stablecoin offers an alternative to traditional centralized stablecoins by providing decentralization, stability, and transparency. It has gained popularity within the crypto ecosystem and is widely used for various purposes, including decentralized finance (#DeFi) applications, remittances, and as a stable store of value.