A decentralized autonomous organization named MakerDAo created Dai stablecoin. MAkerDAO was founded by Rine Christensen.
Dai is a unique stablecoin. It is an Ethereum-based stablecoin that is indirectly pegged to the U.S. dollar and backed up by a collection of other cryptocurrencies.
As Dai is soft pegged to the dollar it keeps its value approximately at $1. An automatic system of smart contracts is used to execute the contract and maintain its value.
As Dai is a stablecoin it can be used as a tool to overcome volatility, especially in unpredictable market conditions. At the time of writing the price and market capitalization of Dai are $.9997 and $ 5.28 billion respectively.
Dai and it’s working
Dai(DAI) is a stablecoin based on the Ethereum platform. It is by using MakerDAO’s smart contracts that Dai is created and destroyed through an over-collateralized loan and repayment process.
One can deposit one of the approved collaterals such as Ether in a contract to mint new DAI, as a loan against the value of their collateral. The collateralization ratio is the USD value of the collateral divided by the amount of DAI borrowed.
The collateral can be withdrawn after the loan and accrued interest is repaid and the returned Dai is destroyed.
Once the value of the collateralization ratio drops below a level, a portion of the collateral will be sold off on the decentralized exchange to keep the price of Dai stable.
Dai, which functions as a stable Ethereum token, can be used to pay for regular needs and be easily transferred between Ethereum wallets.
This system serves to maintain a stable value of Dai, pegged to the dollar, and can be used as a stable medium of exchange and store of value.
Still, Dai is influenced by the market forces and the associated risks in the technology and governance of the MakerDAO system.
Dai Price Prediction
The future of Dai looks promising as the price predictions are bullish. Dai being a stablecoin, is expected to maintain its peg to the US dollar except in case of minor fluctuations of around 5% based on market conditions.
Moreover, there is a global interest in decentralized finance which could speed up the adoption of Dai.
With a more comprehensive regulatory environment, trust and confidence in cryptocurrency are expected to increase reflecting positively in its price.
Various metrics are considered when predicting the prices of all assets including cryptocurrencies. As cryptocurrencies are more volatile, the prediction and the real market performance can vary significantly.
Technical analysis is used to predict the future performance of cryptocurrencies and they include various parameters. Simple moving averages (SAM), calculates the average of a range of prices by the number of periods in the range.
The Bollinger bands, another parameter are used to gauge the volatility to determine their over-valuation or under-valuation.
The relative strength index(RSI) measures the momentum of price changes of a security to understand the degree of valuation.
The moving average convergence divergence assesses the power of price movement in a market. The fear and greed index measures the sentiment of the market.
The sentiment of the market, whether it is bullish, bearish, or neutral is also considered in price predictions. Based on these insights the value of the cryptocurrency is predicted.
Based on the historical price movements and analysis leveraging various parameters mentioned above, Dai’s price prediction from 2024 to 2030 is given in the table below.
| Year | Yearly Low | Yearly High |
| 2024 | $ 0.999758 | $ 1.014489 |
| 2025 | $ 0.934574 | $ 1.067991 |
| 2026 | $ 0.999427 | $ 1.003590 |
| 2027 | $ 0.997119 | $ 1.002901 |
| 2028 | $ 0.982525 | $ 1.002969 |
| 2029 | $ 0.989957 | $ 1.035213 |
| 2030 | $ 0.999805 | $ 1.008912 |
Conclusion
Dai is a stablecoin founded by MakerDAO which offers a promising future with its price stability as it is pegged to the US dollar.
The growing interest in decentralized finance, the improvements in the regulatory environment, and the minimum volatility are expected to boost trust and confidence in Dai, influencing its price.
Even though the Dai price predictions look bullish, they are based on various metrics and are influenced by market sentiments and hence can lead to variation between predictions and actual performance.
It is expected that the price of Dai will remain stable between the years 2024 and 2030 with minor fluctuations. Any potential investor should conduct due diligence and analysis before embarking on any investments.
