Dai reached #100 today. This is interesting as the marketcap is scheduled to lower dramatically (see pic) as the price of ether collapses going forward.
tldr; dai is a stablecoin backed by ether, ether is sold off to buy and liquidate dai, lowering marketcap but keeping price stable.
HOWEVER it will ironically move up in rank as the altpocalypse unfolds.
So the question is, how far is this little guy going to go? I think people are going to finally notice it when it's the only thing green that's not USDT.
if the price of ether goes down too much then ether is sold at a discount for dai which is then liquidated.
Gavin Gomez
that doesn't lower dai's market cap, that kills leveraged positions it increases amount of eth that servers as global collateral. Obviously, eventually it dies, but I read somewhere it can survive even $50
Jayden Russell
>Obviously, eventually it dies, but I read somewhere it can survive even $50 Why would it ever die?
Tyler Rodriguez
The only not fake stablecoin
Cameron Moore
Because there's a limited pool of ethers available as dai collateral. Once the value of that collateral drops too much there's no way for DAI to keep $1, the system becomes insolvent.
I don't know details of DAI that good but I think there's a special event in that case, that forcefully exchanges all DAI at the current collateral rate?
Caleb Ortiz
>Because there's a limited pool of ethers available as dai collateral ...yeah, the ether anyone wants to contribute to the MKR system, right? I don't think they literally have a fixed pool of eth lol, anyone can mint Dai for a profit IIRC
Isaac Smith
isn't the ether sold for dai? If the dai isn't liquidated, its at least out circulation right?
Justin Rogers
>tied to the dollar >calls it dai what retarded marketer came up with this. just call it or USDm (for usd maker). its retarded. i
Eli Parker
It depends on the speed ETH drops, not how far, dumbass. ETH could go to $0.01 and DAI would work.
Jaxson Turner
> ETH could go to $0.01 and DAI would work. That gives eth a market cap of $1M DAI's cap is $46M, it's impossible for $1M in ETH collateral to support $46M. This means forced global liquidation. It would only be possible with some other collateral in the future
Grayson Flores
the fuck are you on about dai's market cap is just a fucking simple arithmetic calculation on cmc you dense cunt fuck i hate this site
Robert Barnes
do you know dai works? for each dai worth $1 there's $1.5 worth in ether as a collateral. When you realize the value of 1 dai you get $1 worth of ether at that moment in time.
Caleb Hill
>do you know dai works? do you know how*
Nathaniel Stewart
I dont get this dai thing. Why would anyone use it? Its it basically allowing margin on eth price? Loans with your eth? Why would anyone ever use it instead of just eth itself? And what happens to eth if dai gets liquidated?
Jeremiah Bell
Stop embarrassing yourself. DAI's market cap cannot be higher than the mc of the collateral.
However, MKR/DAI will move to multi-collateral soon-ish, so if they survive till then, the threat of insolvency should be much lower.
BTW: the MKR-system has a global unwind functionality that can be triggered by MKR holders in case the system is off the rails. MKR/DAI is pretty cool, but it's not yet battle-tested.
Jack Torres
It's the only way to get usd 'stablecoin' without a centralized issuer. So it could be used even for trading drugs and there's nobody to block your account.
Hunter Turner
DAI is a stable coin. If you think the price of BTC/ETH is about to crater, you sell to DAI which is pegged to the USD.
OTOH, it allows to leverage long ETH by putting your ETH into MKR CDP's (collateralized debt positions). You receive DAI for your ETH which you can use to buy more ETH.
Matthew Gray
It means something in Chinese
Benjamin Clark
It's called dai after wei dai en.wikipedia.org/wiki/Wei_Dai Wei Dai (Chinese: 戴维[1]) is a computer engineer best known as the creator of the Bitcoin predecessor "b-money" and as the developer of the Crypto++ library.
Dylan Bennett
>You receive DAI for your ETH which you can use to buy more ETH. Ah here is the tricky part. Ok. So greedy margin and leverage types are gonna get killed again. Not surprised it's cool how dai works in that sense.
Mason Butler
>basing a stablecoin on a highly volatile asset The absolute fucking state of mEtheads.
Jaxon Brooks
>Stop embarrassing yourself. DAI's market cap cannot be higher than the mc of the collateral. is it not fucking variable
