DAI is a decentralized, open-source digital currency that is pegged to the US Dollar. The project has been developed by MakerDAO, a decentralized autonomous organization on the Ethereum blockchain. DAI is intended to be used in everyday transactions without the volatility associated with other cryptocurrencies.
The Dai protocol has been designed so that it does not require any centralized party – such as a government or financial institution – to issue or back it. Instead, its stability comes from the collective action of its users. MakerDAO uses a system of smart contracts to stabilize the value of DAI. The value of DAI is maintained through an algorithm that automatically adjusts the supply based on demand. When demand for DAI increases, more tokens are minted and when demand decreases, tokens are burned.
DAI is currently the fourth-largest stablecoin. The token has a circulating supply of over 6 billion dollars and a 24-hour volume of over 250 million dollars.