Top best application scenarios of Dai
Using blockchain technology, the decentralized stablecoin Dai issued by MakerDAO unleashes the potential of the currency. Dai is generated through the excess guarantee mechanism of the Maker agreement and softly anchors the US dollar.
Unlike traditional fiat currencies, Dai is treated equally—anyone in the world can get it—and is not restricted by various parameters like traditional financial services. Therefore, in the growing field of decentralized finance (DeFi), Dai has become a leader in digital tokens.
More and more people around the world have discovered the application scenarios and advantages of stablecoin Dai. The following are the top ten application scenarios:
Completely achieve financial independence
In the traditional financial system, banks and other financial service companies will require users to provide a lot of information, including personal data, good credit certificate, and even the minimum deposit. Due to these cumbersome requirements, there are still many people in the world who do not have a bank account, or do not enjoy sufficient banking services. In contrast, no matter who you are, where you are, no matter what your economic situation is, you can get financial services through the stablecoin Dai. This creates an unprecedented opportunity for financial independence for all.
In Argentina, where inflation is high, the government has consistently imposed strict control measures on capital (for example, restricting withdrawals), harming the interests of residents who use the US dollar as a savings currency. For these residents, Dai is a solution: the access threshold is lower than the US dollar, and it is more stable than the local currency. 1 Dai is worth US$1, whether it is in the United States, Argentina, or other countries and regions, and can be exchanged peer-to-peer without interference from the central bank or third parties.
Through the Maker agreement, anyone can deposit collateral into a Maker vault to generate Dai, use Dai as a payment method, trade Dai on Oasis or other exchanges, or earn interest through the Dai Deposit Interest Rate Mechanism (DSR) And will not be subject to any restrictions.
Mariano Conti, the head of the Maker smart contract now living in Argentina, explained in a speech how Dai changed his own financial situation and the lives of working people in developing economies.
Autonomous currency generation
Every day, people buy Dai through different exchanges to achieve the above purposes. However, many people choose to generate Dai through the Maker protocol. This process is very simple: the user locks the excess collateral in a Maker vault smart contract and generates a certain amount of Dai based on the locked amount.
Many people generate Dai to do more ETH: lock ETH in the Maker vault to generate Dai, and then use Dai to buy ETH; hope that ETH will increase in value. Some business owners who deposit funds in the field of cryptocurrency generate Dai as working capital to hedge the volatility of cryptocurrency.
Savings
Dai holders can lock Dai in a special smart contract (DSR) and earn deposit interest. Dai deposit interest rate does not charge a handling fee, no geographical restrictions, and no liquidity barriers-there is no minimum deposit requirement, users can withdraw all or part of Dai at any time.
Anyone can access the Dai deposit rate contract through Oasis Save or other DSR-integrated projects (for example Argent wallet). In addition to promoting financial independence and giving users complete control, DSR can completely change the paradigm of the DeFi movement.
Changing in constant terms
The stablecoin Dai provides stability for the highly volatile cryptocurrency sector. Dai soft anchors the US dollar and is endorsed by excess collateral locked in each Maker vault. When the market fluctuates sharply, Dai can help users store value and become a safe haven in the field of cryptocurrency.
Convenient, fast and low-cost remittance service
As a stable medium of exchange, Dai can be used to repay debts, cross-border transactions, and purchase goods and services. Cross-border transfers through traditional financial services are costly and extremely time-consuming. If you transfer money from a Western Union U.S. branch to an Argentina branch, you will be charged a handling fee of $9 for every $1,000 transferred. Because the Maker protocol is built on the blockchain, users can use Dai to make peer-to-peer transfers around the world, which only takes a few seconds, and the cost is only a small part of the traditional transfer service (users only need to pay for the Ethereum network Miner's fee).
24/7 service
Traditional financial service companies have established business hours, usually in accordance with traditional business hours. That is to say, even if users can handle business on the rest day (for example, deposit and withdrawal using ATM machine, or deposit and transfer through computer/mobile application), their transaction will not be settled until the next business day.
However, Dai is a decentralized product built on the blockchain and is open to users 24/7. Whether users want to generate Dai or use Dai to purchase goods or services, they can do it according to their own arrangements, regardless of time and place.
Convenient legal currency entrance/exit
Users can easily exchange Dai for fiat currency through multiple regulated platforms. For example, Coinbase and its trading platform Coinbase Pro provide a two-way exchange service between Dai and fiat currency, and currency transfer service provider Wyre also provides the same service.
Transparency unmatched by traditional financial systems
Through the decentralized Maker protocol, users can view the operation of Dai and DSR from a macro and micro perspective. Blockchain technology also has built-in checks and balances, because all transactions are recorded on a public ledger visible to everyone. In addition, technology-savvy users can view Maker’s audited and formally verified smart contracts to analyze how these financial technologies operate from a more granular perspective. The traditional financial sector can never provide such high transparency.
Ecosystem and DeFi builder
The adoption rate of Dai is getting higher and higher. As more and more projects integrate Dai and/or Dai's functions (for example, DSR), more and more people use Dai, and the Maker ecosystem is also growing. Developers can use Dai to provide their platform users with the ability to use stable assets for trading, opening the door for risk-averse participants. The growing group of developers and the group of Dai users have enhanced the network effect of the Maker protocol, and improved the awareness and stability of the entire ecosystem.
As a key component of the DeFi movement, the stablecoin Dai is an indicator of value storage items, tradable assets, passive sources of income, and the amount of collateral in the Maker vault. As more and more people realize the advantages of a secure and inclusive license-free open system, the DeFi movement will continue to develop.
All in all, the above application scenarios of stablecoin Dai can allow all individuals and businesses to benefit from digital currency.
