As many people know, DAI It is a stable Cryptocurrency whose main characteristic is that its price is always equivalent to 1 USD, developed by the MakerDao organization and backed by funds frozen in a Smart Contract of the Ethereum network (also called “collateral”). If we read its technical document carefully, it states that the initial use of Ethers (ETH) as the only collateral was a momentary limitation that would later change with the authorization of the use of other tokens or Cryptocurrencies to achieve a backup system called “multi- collateral” (a basket of currencies).
This estimate was met when on [Update date] a successful update was applied to the protocol of the MakerDao system that enabled the ability to create multi-collateralized DAI tokens, known as “multi-collateralized DAI”. Likewise, to differentiate these new tokens from the DAI that already exist, the DAI previously created was renamed “Single-Collateral DAI” (abbreviated “SAI”), which has also been adopted in numerous platforms as its new stock symbol.
There are currently 2 types of MakerDAO:
The creation of a new single-collateralized DAI (ETH) was only possible until November 18, 2019. After that date, the platform only allows the minting of multi-collateralized DAI. All users who, to date, have SAIs –formerly also called DAIs– will be able to carry out the respective conversion using a tool provided by MakerDAO. It should be noted that this procedure is not mandatory at the moment, although it is known that MakerDAO plans to carry out an automatic conversion for SAI holders to DAI.
It is important to know that both the DAI and SAI tokens maintain their price anchored at 1 USD.
Among the changes that the new DAI brings us are:
[*] SAI tokens from the DAI ecosystem (“Single Collateral DAI”), which are stored and transferred via the Ethereum network, should not be confused with SAI tokens issued by the Sideshift.ai exchange, which run using the Simple Ledger Protocol in the Bitcoin Cash Cryptocurrency network.
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Being a stable currency, DAI promises to always maintain its value over time regardless of the rise or fall of other Cryptocurrencies, and despite not having collateral in physical dollars, DAI has a 1:1 parity against the dollar.
Although many find it hard to believe how DAI works and its 1:1 parity against the dollar, it is one of the safest stable tokens in this category of Cryptos, since its first launch it has shown that maintaining the desired value of $1 is possible by making use of multiple collaterals and smart contracts.
This is because making use of a single collateral would be unfeasible in the future, since greater liquidity of DAIs would be needed and this would make leverage with Ether too expensive and riskier, which is why they decided to integrate other digital assets to distribute in this way the cost of creation and the risk.