Fearing that Tether may implode in the near future, investors are now exploring how to buy Multi-Collateral DAI. As an alternative and fully decentralized product, DAI is a stablecoin that may be a better solution for hedging against the market.
The stablecoin market may be boring for some, but it is necessary to explore it in order to protect your investments against volatile markets. Many are exploring other solutions like TUSD and USDC, but for most DAI seems to work even better.
If you are not sure about choosing DAI, then you have come to the right place. In this article, I will explore DAI and explain how it works within Maker’s ecosystem. By the end of the article, you will also have the chance to read a comprehensive how-to guide regarding buying DAI.
For those who’re impatient and can’t read the whole article — You can buy DAI on the following exchanges:
But I suggest you to read the whole piece, to get a better idea about DAI and the purchasing process.
Why are stablecoins important?
Before you read more about DAI and how it works, it would be great to first understand why stablecoins are important. After all, all investors are now at a point in the market where selling seems like a good possibility.
2020 is quite a strange year when it comes to the cryptocurrency market and everyone can probably agree that bulls should not get their hopes up too soon. Who knows what can happen by the end of December and in the event that bears take over the market, you should be able to utilize your knowledge about stablecoins.
As the name implies, stablecoins prefer stability and they enable users to stay safe against all market fluctuations by owning these assets. One may own stablecoins at any moment for multiple reasons. For example, if you are trading and seek to enter a lower position, it may be wise to convert your holdings into stablecoins to save yourself from losses.
Furthermore, stablecoins are also a great option if you are expecting short-term volatility and are not sure in which way the market might move. It is better to stay safe rather than be sorry and evading a -15% loss should definitely be a better move than missing out on a small bullish rally.
Additionally, you should also be interested in stablecoins like Multi-collateral DAI if you wish to withdraw a part of your portfolio or if you are bearish. In the second case, you are probably expecting the market to crash or at least to test support one more time. As such, it would be abnormal to not convert your cryptocurrencies in stablecoins if you do have faith in your prediction.
Ultimately, stablecoins may not offer much. However, it is still essential to choose an asset in this category that is fully decentralized. By doing so, you ensure full custody over your money and that no one can freeze it.
What is Multi-Collateral DAI Stablecoin?
Now that I have mentioned decentralization it would be a perfect moment to start talking about Multi-Collateral DAI, or simply DAI. Created by Maker, this is one of the most decentralized stablecoins in the entire market. Launched on November 18, 2019, Maker created DAI to fuel its ecosystem and finally improve the efficiency of its lending features.
Practically, DAI is an upgraded version of the protocol’s earlier SAI cryptocurrency. Following the original launch in November 2019, SAI holders had the chance to migrate to the new stablecoins. But what is DAI all about?
On Maker, users can generate DAI by leveraging collateral assets approved by the platform’s governance model. The Maker Governance (MakerDAO) is an integral part of the protocol, as it is the main feature that supports Maker’s decentralization. Likewise, DAI is also a decentralized and unbiased cryptocurrency that is soft-pegged to the U.S. dollar.
As a cryptocurrency based on the Ethereum network, users can store DAI in any wallet that supports ERC-20 tokens. It can be used for trading, dApps, and within Maker’s lending system as well.
Users can easily generate and access DAI by depositing collateral assets into Maker Vaults. But just as any other asset, it can also be obtained through a broker or exchange.
Maker encourages crypto enthusiasts to use DAI for payments and to utilize it on various other projects. Moreover, Maker also offers a unique savings feature called DAI Savings Rate (DSR). With this feature, individuals can finally obtain financial independence by being able to access decentralized financial instruments.
Now, it is no longer needed to hedge against inflation and market turbulence by relying on banks. Through Maker, it is possible to create a savings account that is completely decentralized and operated solely by the owner.
With that in mind, DAI is more than just a stablecoin. It offers plenty of features and acts as a 100% permissionless asset. You can also use it on a multitude of DeFi applications as most projects support DAI.
Where can you buy DAI?
Now, you may have one question in mind: How to buy Multi-collateral DAI? In the following section, I will showcase three exchanges on which you can purchase the stablecoin. To help you decide, I will also explain why each trading platform is unique!
At Coinuma, the idea of cryptocurrency trading is all about simplicity. If the interface is so complicated that you cannot make a trade in only a few minutes, then what is the point?
Cryptocurrencies may be complicated, but the platforms that the sector offers do not have to be!
On that account, you can view Coinuma as an entirely new exchange that views the user as its number one asset. You will find no other exchange as easy to use as Coinuma. When I first registered on this exchange, I could not believe how easy it was to set up my account.
More than that, I have found trading on Coinuma to be seamless and hassle-free. I did not have to learn new concepts, google about what certain features mean, etc.
With all these factors combined, you will find an exchange that truly cares about its customers, and what can be better than that?
One more thing that you may be interested in is that Coinuma deeply values innovative altcoins. So do not be surprised when you find out that the exchange offers almost all popular cryptocurrencies. One such crypto asset is the DAI stablecoin, which you may need if you ever decide to take a step back and let the market move without you for once.
How to buy Multi-Collateral DAI on Coinuma
In my humble opinion, I found Coinuma to be the best option for buying Multi-Collateral DAI. Their platform is easy to use and you may even have the chance to earn inverse fees.
But what if you do not want to trade on a centralized exchange? Decentralized Finance (DeFi) is all the rage at the moment and new users seem to be enjoying using decentralized exchanges. One such trading platform that is at the top of DeFi is Uniswap.
By some, Uniswap is regarded as being the King of DeFi. While the platform has lost some of its popularity in recent weeks, it reigned as the number one DeFi project for most of 2020. But why is Uniswap so popular?
On this decentralized exchange, you not only have access to trading via token swaps but you can also yield farm as well. Yield farming is a brand new way of earning passive income through your investments and stablecoins seem to be the most, wait for it, stable option when it comes to risk.
But if you are simply looking to trade and hedge the market, you will have to conduct a token swap. Uniswap may have higher fees in this regard compared to decentralized exchanges, but the difference is not that big. In the end, you are choosing a DEX not because of its business model but due to its decentralization.
How to get Multi-collateral DAI on Uniswap?
There may be no direct links that I can share with you due to Uniswap’s unique trading system, but I can still guide you to their main exchange. You can make a token swap for DIA via this link.
Simply select a cryptocurrency like ETH in the first field and pick DAI in the second field. Connect your Metamask wallet as well and click on ‘Swap’ as soon as you are ready!
Albeit centralized, Binance is still a great option for buying DAI. While some consider this exchange to be controversial, there is nothing particular to worry about at the moment. Binance has a good track record after all despite some mishaps and there are now more users than ever who trade on this exchange.
Binance has an incredibly complicated KYC process that requires lots of information. But as long as you are trading low sizes, you will have nothing to worry about since the exchange allows KYC-less accounts.
According to market data aggregator CoinMarketCap, Binance is an exchange with the highest daily trading volume. At the time of writing, Binance processed more than $5 billion in volume. On the other hand, the next largest exchange is Huobi who processed only $2 billion.
Since Changpeng Zhao created Binance in 2017, the cryptocurrency exchange has gone from being one of the least used trading platforms to being number one in the market. Nevertheless, there are still some events that have made users reconsider their choice.
Lately, Binance deals with bad performance in times of high volatility. On certain occasions, the platform even went offline as it could not handle the gigantic traffic. If you are trading constantly this may be a problem. But if you just make a trade or two from time to time, then this is not really a problem since the exchange’s performance only worsen occasionally.
Just like the previous two trading platforms, Binance also supports multi-collateral DAI. Some of its trading pairs may not have the best liquidity, but it is still enough for most investors.
How to buy multi-collateral DAI on Binance
As I said, Binance does not have a great history and there are many rumors surrounding the exchange. But despite everything, it is still used by traders all around the world. If you are looking to buy DAI, you should at least check it out.
Stablecoins have great significance when it comes to trading cryptocurrencies as they provide you with the simplest way to manage your risk. But picking any of the popular stablecoins is not enough, you should know the strengths and weaknesses of each one before you finally decide to hedge against volatility.
As a fully decentralized cryptocurrency, multi-collateral DAI is considered to be the best option at the current moment. Many consider it to be the future of digital cash as it is permissionless and enables you to save yourself against inflation without using a bank. In fact, the Maker protocol even offers a savings program for DAI with the help of the DAI Savings Rate (DSR).
Now that you have finished this article, you finally know how to buy multi-collateral DAI and where to find it. Coinuma, Uniswap, and Binance are definitely the best options for purchasing DAI, but you never know if they personally fit you unless you try them.
After all, even traders have their own individual tastes and prefer certain features over others. Due to that reason, it is always important to try out new trading platforms.