Lets learn about DAI (USDS) token in simple terms
In the world cryptocurrency, there are some tokens that try keep their price stable at all times. Such tokens are called stablecoins. DAI which has now been rebranded USDS is one such popular stablecoin.
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My sincere love and best wishes to everyone. I hope everyone is well and healthy.
Today I am here to talk to you about another new token. #DAI
DAI is basically a decentralized stablecoin built on Ethereum blockchain whose price is usually around 1 US dollar. That is, 1 DAI ≈ 1 USD. As you can see in image above its current price is $0.9999, which is almost equal the dollar. This stable price is what sets it apart from other cryptocurrencies.
How does DAI work?
While many other stablecoins are backed directly by dollars deposited in banks, DAI is a little different. It works on a collateralized debt position method, which is managed by a decentralized project called MakerDAO. Simply put, users can create DAI by locking their crypto assets (such as Ethereum, USDC, etc.) in smart contracts. When they repay the loan, the locked assets are returned.
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Due to this mechanism, DAI is not under the control of a single company. Instead, it is completely community-controlled and automated smart contracts.
Rebranding DAI → USDS
In 2025, MakerDAO announced that the DAI token was being renamed USDS (United States Digital Stablecoin). The main purpose of the name change was to attract more users through the new brand and increase the credibility of DAI on an international level.
Uses and Benefits
DAI or now USDS can be used for various purposes
As a means of transaction in the crypto market,
For lending and investing on DeFi (Decentralized Finance) platforms,
Or as a safe way to store value.
Its price is almost always around $1, so it serves as a kind of “safe haven” for crypto investors.
In short, DAI or USDS is a trusted, decentralized, and stable digital currency that can serve as an alternative to the dollar. Despite the rebranding, its core purpose remains the same — to be part of a stable and transparent financial system.
Until today, everyone stay well and healthy, and pray for me.
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What an excellent clear and beginner-friendly explanation of DAI (now USDS) this was, Wow @aburihan1, I really enjoyed the way you simplified complex ideas in banking like collateralized debt position and the function of MakerDAO to simple language that is easy to understand. It also made the post fun and entertaining.
This section in which you described the distinction between DAI and other stablecoins was particularly useful. Most of them are not aware that DAI is not supported by bank funds but crypto assets secured by smart contracts - that fact was a real value addition.
I would also like to give a disclosure of how you have brought up the rebranding to USDS in 2025 and this has made the post sound contemporary in nature.
In general, it was a balanced article, as it was informative, easy to read, and written in a kind way. Great job, @aburihan1! 👏