As a decentralized, borderless, and composable digital currency pegged to the US Dollar, Dai has many benefits and a vast range of use cases. Worldwide, people generate the Dai stablecoin or purchase it to use for everything from international remittance and inflation protection to e-commerce and gaining access to the newest DeFi products and services.
Dai’s versatility has enabled MakerDAO to become a blockchain project that is well on its way to “crossing the chasm”—experiencing meaningful and substantial adoption both within and beyond the immediate crypto community. As of this writing, almost a billion Dai have been generated and put to use in many ways, but primarily in the following five areas:
- Inflation protection and savings
- DeFi products and services, and the enormous opportunities they offer
- Digital art
Let’s explore how Dai is used most today—and why it fits these user needs so well!
1. Inflation Protection and Savings
Many early cryptocurrency adopters were motivated to explore the technology due to economic turbulence experienced in their countries. While certain national currencies are highly stable and desirable, they are not always easy to access. Dai, however, can be purchased on various exchanges or generated from several forms of crypto collateral by anyone, and then held or transferred easily anywhere in the world. As a user-created decentralized stablecoin, Dai has no centralized issuer or administrator. As long as users hold their Dai in a software wallet, such as Metamask, they maintain total independent control of their funds.
Dai has become extremely popular in Latin America and other regions where national currencies have experienced significant volatility. In fact, Dai has become Argentina’s most popular crypto by exchange volumes—ahead of even Bitcoin—due to concerns over hyper-inflation. As of mid-August, Argentina’s 12-month inflation rate was over 40%.
Dai is the most-used cryptocurrency in the DeFi space, and no discussion of Dai use would be complete without acknowledging how the stablecoin is a major staple of DeFi growth and vibrancy.
Dai’s composability means it can readily be plugged into almost any DeFi application (dapp) on the Ethereum platform. Dapps enable anyone with an internet-connected device to gain access to financial products and services the likes of which are typically only available through traditional intermediaries. The most popular dapps include peer-to-peer interest rate protocols (colloquially referred to as lending protocols) and decentralized exchanges which are software platforms that enable peer-to-peer digital asset trading without middlemen. As DeFi grows, Dai should continue to be heavily relied on in current and yet-to-be created Dapps.
Many gamers are very comfortable with the concept of digital ‘currencies’—valuable items and collectibles that are traded seamlessly through what have become highly sophisticated in-game economies. But while trade within those economies might be smooth, moving funds in and out of systems when a game allows can be slow and expensive, depending on gamers’ locations and banking arrangements.
As a borderless currency that anyone in the world can quickly transfer and store, Dai is the ideal token for the gaming world. Unlike centralized game currencies, no company can devalue Dai or discontinue its wider use. Dai is a stable unit of account controlled exclusively by the people who hold it.
4. Digital Art
One very exciting emerging use case for Dai is as a currency of payment for digital art. More and more digital artists are embracing blockchain technology by using one-of-a-kind, limited-supply blockchain assets called non-fungible tokens (NFTs) to represent their original singular works and series.
While typical digital image files can be copied endlessly, NFTs are unique and prove provenance and ownership. Authentic art can be sold at auction, transferred, and traded on the secondary market by artists and collectors, all with the security provided by the blockchain.
NFTs also enable some truly imaginative applications. For example, Async.art’s layered, programmable art allows buyers to influence the look of a piece. Async also recently opened its first art auction for Dai.
Dai has also been integrated into other popular art platforms, including:
- Foundation, an open art market that describes Dai as “Culture’s currency”
- OpenSea, one of the largest marketplaces for digital art and other collectibles
- The Museum of Contemporary Digital Art (MoCDA), a cultural and educational initiative
- Artist Olive Allen’s “Cruel Summer Bears” series is sold exclusively for Dai on OpenSea
E-commerce has certainly come a long way since the early days of Amazon and eBay, yet the industry still lacks efficient global payment processes. But cryptocurrency is changing that. An estimated $4 billion worth of bitcoin was sent through payment processors in 2019
Coinbase Commerce, which launched in early 2018
Dai: The Most Popular Decentralized Stablecoin
Dai continues to carve out exciting use cases in both the blockchain sector and the real world, making meaningful differences in the lives of its users. The decentralized, borderless, and transparent nature of Dai fosters the development of new products and services for the community to explore, adding value to the broader Maker ecosystem and driving further global adoption of the Maker Protocol in the process.
Explore some of the many applications and use cases for Dai in the Maker ecosystem!