Top 10 Use Cases for the Dai Stablecoin and Their Benefits
Utilizing blockchain technology, MakerDAO unleashes more potential of the currency through the decentralized Dai stablecoin. Dai is pegged to the U.S. dollar, generated through the Maker protocol and backed by a large amount of collateral. In short, Dai is digital cash, which can be thought of as a better, smarter dollar.
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1. Complete financial independence
Using the traditional financial system, banks and other financial services companies have high barriers to entry, including providing personal data, proof of good credit, and even minimum deposits. These requirements have created a lot of unbanked people in the world. However, the Dai stablecoin allows anyone, anywhere, regardless of their economic status, access to financial services with unparalleled freedom.
In inflation-heavy Argentina, the government often imposes restrictions on capital, such as restrictions on withdrawals, that limit residents who use the dollar as a savings currency. Dai offers a solution for these citizens: easy access to a more stable currency. A Dai token is worth the same in the U.S. as it is in Argentina or anywhere else in the world, and can be exchanged peer-to-peer without interference from a central bank or any third party.
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2. Generation of self-sovereign currency
Every day, people buy Dai on various exchanges and use it in various ways. However, many people are now choosing to generate Dai on the Maker protocol instead of buying it. The process is simple: users lock excess collateral in Maker Vault and generate Dai based on the amount of collateral they have locked.
3. Savings
3. Savings
Holders of the Dai stablecoin can earn interest on holding Dai (DSR) by locking it in a special smart contract. There are no fees, no geographical restrictions, no liquidity barriers, and no minimum deposit required to obtain DSR, and any amount of Dai can be withdrawn at any time.
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4. Stability in volatility
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5. Convenient, fast and low-cost remittance
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6. Always available
Traditional financial services firms operate on fixed schedules. This means that while users can go to the bank on weekends (for example, using ATMs to deposit and withdraw cash, or use mobile apps to deposit checks and transfer funds), their transactions will not be settled until the next business day.
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7. Convenient deposit and withdrawal channels
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8. Transparency beyond the traditional financial system
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9. Help the ecosystem and DeFi grow
Dai usage is on the rise. There are more and more projects integrating Dai like DSR, more and more people use stablecoins, and the Maker ecosystem continues to grow. Dai empowers developers to offer users of their platforms the ability to trade in stable assets, thereby attracting more risk-averse participants. The growing number of developers and Dai users brings the network effect of the Maker protocol, which improves the stability of the ecosystem.
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10. Other blockchain-based advantages
10. Other blockchain-based advantages
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The benefits of stablecoins are real
Cryptocurrencies and blockchain technology provide an efficient, trustless way to transact, save and conduct business without interference from third parties. The above use cases for the Dai stablecoin allow any individual or business to enjoy the benefits of the digital currency. In addition to its advantages over traditional financial markets, stablecoins have also had some impact on the native cryptocurrency market. We can see that stablecoins and fiat currencies are encroaching on the market share of the original BTC trading pairs. The additional issuance of stablecoins and the over-the-counter premium have become important indicators for judging the trend of the cryptocurrency market. Perhaps in the next bull market, while stablecoins occupy the traditional financial services market, they will also occupy two or three of the top ten cryptocurrencies by market capitalization.
