Steemitcryptoacademy || my week-6 home work submission post for @yohan2on.

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Hello steemians am glad to attend this week lecture today and to submit my homework for professor @yohan2on which is about stable coin. Thanks for your dedicated time on this post as you read through.

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I'll be writing about DAI as a stable coin. But before I start I'll like us to have a brief knowledge about what stable coin is all about.

WHAT IS STABLE COIN

Stable coins are said to be cryptocurriens that are pegged or having a fixed price to other asset. The asset these stable coins are pegged to are also stable like Fiat currencies and commodities like Gold.

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Now let go into the main thing which is DAI.

WHAT IS DAI

With the above explanation on what stable coin is dai is a stable coin which is backed by etherium and maker, it's an ERC20 token and can be found In a wallets that supports ERC20 tokens like the matamask Coinbase, houbi etc..
DAI is an outcome of maker Dao, and was found by Rune Christensen which he is the CEO.

It aim is to retain the value to be close to united state dollar (USD) this was possible because of the automated system of the smart contrast built on etherium blockchain.

It was founded on the 18 day of December 2017 and was previously called SAI and has an exchange rate of $1. 00 USD.

1 DAI IS = $ 1

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Dai is keep going and blannced by maker DAO. Which is a decentralized autonomous organization. MakerDAO project has made it possible to solve a problem to the high volatility that cryptocurrency face through the stable coin we are taking about now known as DAI.

Dai does not offer stability only, it it's also offers both transparency and decentralization because it was built on the etherium network. Their is no cut back in on using Dai it can be used just the way you use other cryptocurrency by trading, holding etc..

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WHY IS ETH USED AS COLLATERAL WHY NOT OTHER ERC20 TOKEN

We know that eth is the most important asset when it comes to the etherium blockchain, it's is good for it to be used as the first asset to backs CDP.
However, maker system will still work in any case of the asset, as far as it exist within etherium and can allow USD valuation.

HOW IS DAI BULID.

The creation of dai is simple as it it's generated whenever a user take a loan on maker DAO. Then dai will be destroy as soon as you pay back

Meaning that anyone can crate a new dai just by laying down ether as a guarantee and drawing an appropriate amount of dai. And any time your borrowed dai pus a the fee is payed back you recover your locked guarantee (either) you used to collect dai.

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CAN DAI BE USED FOR TRADE

Since Dai is pegged to USD and worth $1 each. Means it can be traded like any other ERC20 token and can also be traded against other cryptocurrencies which you pair Eg BTC|DAI, ETH|DAI on an exchange.

HOW TO HOLD A DAI TOKENS

To hold a Dai token have to take a loan on a maker Dao. Or trade dai on some exchange like Coinbase, huobi, exchange etc.

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IS DAI IMPORTANT

Yes Dai is consider as one of the best and is a game changer in the following ways.

• it can never be shutdown by any authority or government

• company nor individual has no control over it.

• it can be exchanged without any middleman

• anybody that has etherium wallet can own, accept and transfer Dai.

• it can be traded like any other ERC20 token freely.

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Dai is a game changer as it allow dollar (USD) to be transferred in any amount immediately with no fees, no involvement. This has authorise a generation that exist purely within the blockchain and cannot be closed.

IN CONCLUSION

99.999+% of users do not need to understand how Dai works, they only need to trust it, and the history of Dai provides the trust needed. If you need to understand Dai deeper to feel comfortable using it, then you should carefully read and understand how it works, and plenty of additional information is easily accessible via Google.

I really appreciate you all for going through my article.

Thanks!

Cc:

@steemcurator02

@yohan2on