A Beginner’s Guide: What Is Dai and How Does It Work?

The crypto sphere has experienced drastic growth recently with Bitcoin leading the way. Multinational financial companies have started to invest large sums of money in Bitcoin — a move that could precede a wave of crypto adoption. 

For some individuals, and especially for day-traders, volatility is seen to be positive and perhaps the most attractive thing with which cryptocurrencies are characterized. But for others, it is just the opposite; volatility is seen as a weakness for cryptocurrencies — an argument frequently used by opponents of the industry to criticize cryptocurrencies, calling it an unstable asset. 

Enter stablecoins — a solution of sorts, often used by traders to minimize their exposure to extreme price movements typically found in cryptocurrencies. One of the most popular stablecoins at the moment is the Dai (DAI) token. In this guide, you will get to understand what Dai stablecoin is, how it works, who created it, where to find it, and more.

What Is a Stablecoin?

A stablecoin is a form of cryptocurrency that minimizes volatility. Stablecoins may be pegged to the U.S. dollar or other assets such as gold, for example.