DAI

Dai is a decentralized stablecoin designed to track the value of the US dollar while operating on public blockchain infrastructure. It is issued through the Maker protocol, where users lock approved crypto collateral in smart contract-based vaults and generate Dai against that collateral. This structure makes Dai different from fiat-backed stablecoins because its supply is created through overcollateralized debt positions rather than direct custody of bank reserves.

The protocol uses on-chain governance and risk parameters to manage collateral types, liquidation thresholds, and stability mechanisms. As a result, Dai is closely tied to the broader DeFi ecosystem, where it is used for lending, borrowing, trading, payments, and treasury management. Because it is available across multiple chains and integrated with many DeFi applications, Dai often serves as a settlement asset and a reference unit for dollar-denominated activity in crypto markets.