Dai is a decentralised, collateral-backed stablecoin pegged to the US dollar, created by the MakerDAO protocol on the Ethereum blockchain. Unlike traditional stablecoins, Dai is not issued by a central entity but is instead generated by users who deposit cryptocurrency as collateral in Maker Vaults.

As a fully decentralised stablecoin, Dai plays a crucial role in the DeFi ecosystem, enabling users to participate in decentralised lending, borrowing, and trading without exposure to cryptocurrency volatility. It maintains its 1:1 peg to the US dollar through an algorithmic system of smart contracts and over-collateralisation.

Dai’s utility extends across multiple blockchains, making it a popular choice for DeFi applications. It is widely used for payments, hedging, and as collateral within various protocols. The introduction of Multi-Collateral Dai (MCD) allows multiple types of collateral assets to back Dai, enhancing its stability and security.

As an active contributor of decentralised finance, Dai has established itself as a reliable and transparent alternative to fiat-backed stablecoins, promoting financial independence and inclusivity.