As Much of The Crypto Market Struggles to Recover, the Dai Stablecoin Holds Steady
On Monday, the cryptocurrency market was hit hard, with many cryptos losing weeks of progress in a matter of hours. Major players like Bitcoin fell to their lowest point in months, and today many of them are just starting to recover.
That’s not true of stablecoins like Dai, which is tied to the US dollar. Stablecoins will fluctuate with the value of dollar, but they keep their same basic value most of the time. They simply trail behind whatever currency or asset they are tied to, and in Dai’s case, that means it hovers around the $1 mark.
How Dai Weathered This Week’s Crypto Storm
While other cryptocurrencies plummeted, Dai managed to stay fairly even and then spiked up to $1.005 briefly today before falling back to its normal level. This kind of somewhat predictable behavior can make stablecoins a valuable asset for investors, allowing them to move from one currency to another fluidly and easily.
Over the last 24 hours, the Dai coin has changed only 0.1%. Its trading volume has actually gone up 17.51%, which is remarkable for a cryptocurrency at this time. Most cryptos, even the more popular ones, have seen a drop of anywhere from 10 to 20%. They are losing as much trade volume as the Dai stablecoin is gaining. You can see the attraction for this type of crypto and why it might be considered a sound investment.
What Is Dai?
The decentralized crypto Dai operates on Ethereum and uses the Maker Dai Stablecoin System. It has a 1:1 ratio with the US dollar, meaning it’s actually backed by a fiat currency. All of that can be viewed on the Ethereum blockchain, offering real transparency and helping to keep the value of Dai stable.
Dai is used in a number of dapps, or decentralized apps, throughout the DeFi ecosystem. It can be used to buy other digital assets, and people use Dai coins to invest, borrow, or lend.
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