Cryptocurrency Q&A
What type of collateral does DAI use?
What type of collateral does DAI use?
SamuraiWarriorSoulful
Wed Oct 16 2024
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5 answers
848
I'm curious about the collateral that DAI relies on. I want to understand what kind of assets or mechanisms are backing this stablecoin to maintain its value.
5 answers
SumoMight
Fri Oct 18 2024
MakerDAO is a decentralized finance (DeFi) platform that enables users to borrow and lend digital assets in a trustless and permissionless manner.
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DongdaemunTrend
Fri Oct 18 2024
One of the key offerings of MakerDAO is the Dai stablecoin, a decentralized stablecoin pegged to the US dollar. To borrow Dai, users can leverage the MakerDAO system by depositing approved collateral.
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CryptoNinja
Thu Oct 17 2024
The collateral can be any Ethereum-based asset that has been approved by the MKR holders, who govern MakerDAO. This ensures that the assets used as collateral are of high quality and have sufficient liquidity.
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BitcoinBaron
Thu Oct 17 2024
Some examples of approved collateral include ETH, the native token of the Ethereum blockchain, as well as other popular ERC-20 tokens such as ZRX (0x) and OMG (OmiseGO). These tokens are widely accepted and have established trading pairs on various cryptocurrency exchanges.
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CosmicDream
Thu Oct 17 2024
By depositing approved collateral, users can generate a Collateralized Debt Position (CDP) on MakerDAO. This CDP represents their loan and allows them to draw Dai against the value of their collateral. The amount of Dai that can be borrowed is determined by the Collateralization Ratio (CR), which is the ratio of the value of the collateral to the amount of Dai borrowed.
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