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DAI is a stablecoin backed by the US dollar. We all know that the cryptocurrency market is known for its volatility and massive price fluctuations. DAI is built on ERC-20 to accelerate collateral borrowing and lending. MakerDAO regulates the value of DIA to ensure the price of DAI will remain stable. MakerDAO is the decentralized governance community of this blockchain. Let’s take a look at the fundamental features of DIA to understand it better.

What is DAI & MakerDAO?

MakerDAO is a peer-to-peer community, or Decentralized Autonomous Organization (DAO) created on the Ethereum network. It allows people to lend and borrow cryptocurrencies easily. People can borrow and lend in this network through smart contracts. 

To avoid the problem resulting from the volatility of the cryptocurrency market, MakerDAO uses DAI. So one can say that MakerDAO is a crypto lending credit facility, and the interest rate is predetermined.

Who Invented DAI?

Rune Christensen is the founder of MakeDAO. He created the Maker Protocol in 2014. The purpose of creating this protocol was to operate a credit system that would allow users to take out collateral loans to buy cryptocurrencies.

DAI was launched in 2017 as a tool to provide a non-volatile lending asset for users. 

How does Dai work?

Unlike USDT and USDC, DAI is collateralized by other cryptocurrencies. It would help if you spent ETH to buy the dollar equivalent of DAI on reliable exchanges like Bitunivex, or you could collateralize Ethereum DIA. By doing so, you can still hold onto your ETH and acquire DAI at the same time. 

So if a user wants to borrow, they first need to deposit the ETH into a Maker smart contract. Then the contract will create a Collateralized Debt Position (CDP).

Let’s say, particular asset trading at $100. If you deposit the asset at a collateralized rate of 150%, you will receive 40 DAI tokens. 

What if the price of that particular asset falls below $100? You will automatically close out the position. And if you want to get back your initial deposit, you need to pay back the amount you received plus a fee. 

 And if the price of the asset rises, you can draw a Dai token from your CDP to buy more tokens and protect your investment from a drop in value.

How is DAI mined?

DAI does not use mining to produce new coins and confirm transactions like other cryptocurrencies; whenever a user takes out a loan on MakerDAO, the protocol makes DIA. When the loans are paid, the system will destroy Dia.

Use cases of DAI and MarkerDAO

Investors can use Dia as a stable hedge against the volatility of other cryptocurrencies like Ethereum or Bitcoin. The value of Dai is stable, and investors who believe the market will go down can use it. 

MakerDAO is known as a multi-collateral Dia system. This protocol and its DIA stablecoin are a vital foundation and infrastructure for several other protocols in decentralized finance or Defi. 

It can be used as a found rising platform that allows charities to use a smart contract to open up pound rising opportunities. UNICEF is one of the old stations that use these blockchain-based open-source explorations for social projects.

 MakerDAO aims to have an impact on regions that suffer from hyperinflation. It offers a stable alternative to volatile fiat currencies.

Should I buy DAI?

If you want to buy DAI from Bitunivex, you should know that DAI provides transactional benefits for users. It is an ERC-20 token that aims to operate on the Ethereum network. 

 By using MakerDOA, you can Deposit Ethereum and borrow DAI. 

It is completely compatible with the Ethereum network. Users who have purchased DAI can use it in hundreds of decentralized apps. In the following, we are going to talk about other features worth considering.

Passive income

Along with all we have said, DAI Has another unique program called DAI Saving Rate or DSR. It is an interest-generating program that allows individuals to put their talk to work and produce a variable interest income through a locked period. Besides, Dia owners can deposit their tokens into a MakerDAO smart contract designed to add interest to the account.

There is no predetermined minimum deposit, and you can withdraw investment and earnings whenever you want. 

Decentralized means freedom

There is no need for intermediaries, credit checks, or approvals when using this protocol because the system has been designed transparent and permissionless. 

Enjoy security 

 A secure integrated wallet, two-factor authentication, along other security measures are used to ensure the safety of the Dai ecosystem. Developers always verify Smart contracts to ensure liquidity and network viability.

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Best way to buy DAI in Australia

For those who live in Australia, it is possible to DAI using AUD on Bitunivex. You can deposit and withdraw anytime you want on this platform.

Bitunivex is a global crypto exchange platform known for fast transactions. We care about your questions and be all ready to provide you with the best answer possible. That is why we provide you with a wallet and outstanding customer service.

Can I cash out DAI anytime?

When you are dealing with Bitunivex, you are the boss. You can design your trading journey using our services: purchase fiat currencies and all cryptocurrencies with AUD or PayID in a matter of minutes. Whenever you need to withdraw your investment, please send us a request and let the rest to the Bitunivex team. They are devoted to providing users with the best services possible. Is there anything else you need to know about DAI and MakerDAO? We would love to answer your questions and to be of help. Don’t hesitate to give us a call or send us a message. We exist to be helpful, so we answer your question in less than three minutes.