Is DAI backed by USDC?

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DAI, a popular decentralized stablecoin, relies heavily on USDC for its backing. USDC, a centralized stablecoin, holds a significant portion of DAI's collateral, exceeding 30% of its total reserves.

The reliance on USDC poses certain risks for DAI holders, as USDC's centralized nature allows its issuer to blacklist any address at their discretion. This means that users whose addresses are blacklisted may face difficulties in accessing or using their DAI tokens.

Despite these concerns, DAI remains a widely-used and trusted stablecoin in the cryptocurrency market. Its algorithmically-managed supply and demand mechanism ensures that its value remains stable, making it an attractive option for traders and investors.

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