DAI Review: Why It's The BEST Stablecoin!





๐Ÿ”ฅ TOP Crypto TIPS In My Weekly Newsletter ๐Ÿ‘‰
๐Ÿ“บ Video on Stablecoins ๐Ÿ‘‰
๐Ÿ“บ Video on MakerDAO ๐Ÿ‘‰
๐Ÿ“ฒ Join The Coin Bureau Insider Channel ๐Ÿ‘‰
๐Ÿ™๐Ÿป BTC Tipjar ๐Ÿ‘‰ 35YDYtYAB999JxiXQXewzLvMGX4ki2d3WL

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

โฐ Time Stamps โฐ

1:17 What is a Stablecoin?
2:50 Types of Stablecoins
4:42 Background to DAI
6:04 Mechanism to Maintain Peg
9:00 Liquidation Mechanisms
12:30 Historical Performance
13:21 Multicollateral vs. Single Collateral
15:21 Using the Oasis DeFi Hub
17:48 DAI Markets & Trading
18:28 Conclusion

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

๐Ÿ“– Project Resources ๐Ÿ“–

โ–บ MakerDao Website:
โ–บ Whitepaper:
โ–บ Oasis Hub:
โ–บ Migration Tool:
โ–บ Developer Docs:
โ–บ Blog:
โ–บ Twitter:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

๐Ÿ”— Helpful Links ๐Ÿ”—

โ–บ Migration Guide:
โ–บ Launch of MCD:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

๐Ÿ“ Project Overview ๐Ÿ“

DAI was launched in 2017 and was developed by the folks over at Maker. Maker is trying to develop a line of decentralised stablecoins that will be tied to other assets. They have issued two tokens namely the Maker MKR and the DAI stablecoin.

DAI is able to maintain the peg through a careful balance of economic incentives and game theory. Essentially, the system creates arbitrage opportunities every time there is a deviation from the 1 to 1 peg.

Given that the DAI stablecoin is an ERC20 token, this means that you can easily store and transfer it like any other Ethereum based token.

โš™๏ธ Technology โš™๏ธ

Users can borrow DAI by placing their cryptocurrency into what the Maker team calls a ‘Vault’. Currently, the collateral can be Ethereum or Brave’s BAT token.

If there are any deviations from the one dollar peg then the user can either issue DAI or redeeem it easily. This will then see them making a profit on the arbitrage opportunity that opened up.

The incentive mechanism also means that the economics adjusts the supply & demand in the market in order to balance the outstanding DAI.

The MakerDAO vaults are also overcollateralised which means that there will be more etheruem in the vault than DAI outstanding.

๐Ÿ’ฐ๏ธ Multicollateral vs. Single Collateral ๐Ÿ’ฐ

The main benefit of MCD is that you could use more than just ETH in the CDPs. You could also use Bat tokens and they are assessing the possibility of other tokens such as Augur’s Rep.

There is also that name change from CDP to ‘Vaults’. You also have the multicollateral variant adopting the DAI ticker whereas the single collateral type will now be SAI.

You also have some changes to the stability fee. With the single collateral DAI, these were paid in Maker tokens. Now, with the launch of MCD, these stability fees can be paid in DAI.

You also have something called the DAI savings rate or DSR. As the name implies, this is a method through which DAI holders can earn returns on their stablecoin.

๐Ÿ‘จโ€๐Ÿ’ป๏ธ DeFi Hub ๐Ÿ‘จโ€๐Ÿ’ป

The DeFi hub brings together three key features of the Maker ecosystem into one simplistic user experience. You have Oasis Trade, Oasis Borrow and Oasis Save.

Oasis Trade is basically a Decentralised exchange that allows you to trade your DAI for other ERC20 tokens such as Ethereum and Augur’s REP.

Oasis Borrow is where you can unlock DAI by creating a vault. Through this interface you can borrow the DAI by locking up Ethereum or BAT.

The savings part of the hub is where you can lock up your DAI and earn the savings rate that is currently set at 8%.

๐Ÿ“ˆ Trading & Wallets ๐Ÿ“ˆ

DAI is a pretty popular stablecoin and is listed on a number of exchanges. Some of the best exchanges for you to trade it are Coinbase Pro, Kraken and Binance. There is volume on a number of other exchanges as well. You have pretty decent liquidity across all of these exchanges.

Given that the DAI is an ERC20 token you can use any wallet that supports Etheruem. There is quite a list of them but your best bet is probably to go with a hardware wallet like a ledger nano or a trezor.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

๐Ÿ“œ Disclaimer ๐Ÿ“œ

The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.

#DAI #Stablecoin #crypto #makerdao #Review #ethereum #blockchain #erc20 #binance

source

43 comments

  • I tried to explain this the best I could but truth be told, the stability mechanism and liquidation protocol are quite complex ๐Ÿคฏ

    If you guys didn't understand anything, then hit me up in the comments and I will try help you out best I can ๐Ÿ™๐Ÿป

  • Do you still think that DAI is better than UST? Seems like the last crash, UST maintained its peg a LOT better

  • So….you can use DAI vault contracts to "trade" ETH in situ long against the dollar. At the same time, you can earn 7% on ETH gains by reallocation, and you can limit downside risk through overcollateralization, and holding enough DAI to close a vault contact in toto.

    Nice. Not only did they make an excellent mechanism, they created one that would prop up ETH and create a theoretical floor on ETH relative to dollar/ETH demand and volume.

  • Do you still think DAI is the best stable coin?

  • you have a very longwinded way of explaning "fluff". I had the feeling i learned in the first 6min nothing. Dai is a complicated beast why not cut the fluff and then dive into the details expert style.

  • At this time, a year later, do you still think DAI is the best stablecoin?

  • Minimum amount of DAI available to generate is now 5000. With a 150% LR that comes out to about 2 ETH you need to lock in as of this date. Wondering why the increase in the minimum…

  • Dai is the only stable coin you can spend using the coinbase debit card. They dont allow you to spend your fiat from the debit cards. only cryptos. So im playing catch up with stable coins

  • This is just a deconstructed bank, funded by the collective and governed by a stable set of rules that are automatically applied. Holy fuck

  • Still your favorite stablecoin? Iโ€™m a new investor trying to plan how to take profits and hodl over the bear market. I hope there will be videos about it!!

  • Hi Guy. I'm fairly new to crypto and realize that I will need to stabilize my lil profits at some point. Do you have any updates to the best stable coins for 2021? I'd love to hear your thoughts. Thank you for always providing such informative and entertaining crypto content. <3

  • Safemoon listagem binance +coinbase 0,01 vai safemoon pra cima agora vai

  • Ok so because you can make 2.00 can I use it as a savings account and earn more ???

  • US is collapsing so stablecoins tied to a dollar will go down in value

  • Not sure about investing in a coin that sounds like Die lol

  • I don't understand the point of a stable coin pegged to 1 USD. I thought the whole point of crypto was so that it wouldn't suffer inflation, surely if it's pegged to a currency that inflates, it will also inflate as it's pegged?

  • Itโ€™s sounds like we invest our money into Dai which seems like itโ€™s not going to appreciate very much. To weโ€™re thereโ€™s a Group of people the Makers of Dai that have our moneyโ€™s coming in and can take loans whenever they want. Thatโ€™s probably why it really never grows

  • Please Iโ€™m trying to understand this!! Iโ€™m just new!! If you can update me more

  • never mind 'gainz' im after the 'PIPS'. big big tings going on in the DeFi space over the last 12 months since the original release of this video.

  • wait- so is your name dai or guy…. you lost me

  • you should understand first and then you dont have to read it

  • Nice.. just got $30 in dai for free

  • Amazing video. I rarely comment on ANYTHING, but this was a true show of knowledge easily explained.

  • I agree in the defi evololtion that we want to move towards decentralized stablecoins & coins in general, ideally & so far,I've not utilized DAI I've been using USDC mostly,through Coinbase,which is not decentralized, though now that I'm planning to employ Nexus Mutual Insurance & I diversify my liquidity pool investments covered by them or the loans I take from NEXO (also not decentralized,but covered by their $100M coverage,so practically insured) I find the balance between centralized or custodial wallets & DEX's to be mutually beneficial,when the coverage of NEXO for example & defi insurance from Nexus Mutual & liquidity pools interests can all work together & put my mind at ease that all is protected from "most" hacks or smart contract bugs. Your videos are a "wealth" of knowledge & will make me million$ & then some. <see what I did there,lol ;~) Keep up the good work, guy..

  • I don't understand. If I sell 1 BTC at it's peak for, lets say, 100'000 DAI, will I lose DAI when Bitcoin crashes? Or alternatively: Lets say I buy 100'000 DAI with one BTC, then an year later bitcoin is 20'000$ can I but 5 BTC with the DAI I have?

  • If I have 1000$ cash can I buy 1000 DAI without paying any fees

  • that was some complicated salad you served

  • Great video so do you think its a good idea to covert half my BTC holding to Dai here at the new ATH and get back in when we bottom out? I would be doing this on Coinase.

  • T Z

    MKR seems to be more or less tracking the price of ETH. Is that likely to continue? Easier just to buy ETH?

  • living in FL and hearing proper english AHH finally lol

  • Stupid question maybe, but if a coin is stable, how is it interesting then, to invest in it?

  • I appreciate the effort on the video and dai is complicated, but this isn't at all how DAI maintains the $1 peg. This kind of buying/selling you describe when it breaks the peg would only be profitable if you were guaranteed of an immediate arbitrage opportunity from, say, Maker, which you are definitely not.

    The way it's done is adjusting the fees for folks who have minted dai. If dai is under $1, Maker puts the rate minters pay upwards, so they're incentivised to buy DAi on the market and pay off their vault. (this creates buying pressure for dai, and reduces supply, theoretically pushing up the price). If it's over $1, Maker lowers the fee so it's more attractive to mint dai, putting downward pressure on the price.

    From Maker's website:

    "Maker governance helps to maintain the Dai peg by adjusting Maker Vault Stability Fees (SFs) attached to collateral types. Increasing SFs are responses to Dai trading below $1 (higher fees incentivize Vault owners to purchase Dai on the open market to pay down Dai they have generated). When Dai trades higher than $1, SFs are decreased to lower the cost of generating Dai. However, an adjustment can have a slow, incremental impact on Vault holders; therefore,the Communityโ€™s desired end result may take time to appear."

  • Send your 1 DAI over and pay a $40 ETH fee to make $-39.91 "profit"

  • in the example of selling a DAI on coinbase at $1.09, we should also consider the transaction cost from the vault to the exchange, say $0.03. so the person would not start arbitraging unless the price deviates from $1.00 by $0.03. but i guess if this person transports 1m DAI in one go, this effect can be negligible .

  • AJ

    Can i trade my bitcoin to dai to get around the fees instead of trading to dollars when im buying or selling on coinbase?

  • So what is the point of holding MKR then?

  • why DAI— they can call it D$— close to DIE…. hope not…

  • WAIT, if one DAI is equal to $1US, how come that the price of DAI is more than US$1—– due to exchange rate from COINBASE ha ha ha

Leave a Reply

Your email address will not be published. Required fields are marked *