Dai
Crypto Overview
Overview
Dai is a decentralized stablecoin created by MakerDAO that aims to maintain a value of $1 USD through a complex system of smart contracts and collateral. Unlike centralized stablecoins, Dai is not directly backed by USD reserves but instead uses over-collateralized cryptocurrency positions to maintain its peg.
Intended Utility
The primary purpose of Dai is to serve as a stable medium of exchange and store of value in the crypto ecosystem, particularly for DeFi applications. It enables users to hold a stable cryptocurrency value without relying on traditional banking infrastructure or centralized entities.
Actual Utility & Adoption
Dai has achieved significant adoption in the DeFi ecosystem, with substantial real-world usage for trading, lending, and as a stable store of value. As of 2023, there are over 5 billion Dai in circulation, and it is widely integrated into major DeFi protocols and exchanges.
Business Model Analysis
The system operates through the Maker Protocol, where users can generate Dai by depositing supported cryptocurrencies as collateral. The protocol maintains stability through automated liquidations and dynamic fees. Revenue is generated through stability fees and liquidation penalties, which are distributed to MKR token holders.
Founder & Token Distribution
MakerDAO operates as a true DAO (Decentralized Autonomous Organization) with no concentrated token ownership. The protocol's governance token (MKR) is widely distributed, and the Dai generation process is entirely permissionless and transparent.
Technical Implementation
The smart contract system is thoroughly audited and has proven resilient through multiple market cycles. The protocol uses over-collateralization and automatic liquidation mechanisms to maintain the dollar peg without requiring direct interest payments.
Crypto Impact
To assign a comfort level investing in Dai from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to Dai.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
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