DAI: The Future Of Savings?

Author: Web Master Published: July 17, 2020 0 comments

Categories: ???? Tutorials

How to earn an APY using the Maker DSR

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Stablecoins are the foundational piece to DeFi.

Without them, there is no Decentralized Finance world.

However…is it possible to earn more interest using stablecoins compared to savings accounts?

Of course, nothing we write about is financial advice in this column but we think you’d be pressed not to pay attention to this.

DAI may or may not have the foundational element to bring big $$$ into DeFi.

High % APY rates.

Let’s explore it.

– DeFi Slate Team

DAI: The Future Of Savings As We Know It

Guest post by Bernardo Forcelini, a cryptocurrency enthusiast based in Austin, Texas.

Isn’t it laughable for someone to check his or her bank account and see the microscopic interest earned from their savings? Clearly, as of July, 2020, the Federal Deposit Insurance Corporation (FDIC) states that the national average savings’ rate is at 0.06% – independent of account size. The mere thought of reaping any benefit from this current scenario in the United States is a complete financial utopia.

The ghost of inflation constantly haunting people’s accounts overcomes the average bank’s savings rate. A hard and unfortunate fate that no one can escape from in our traditional centralized banking system. Nevertheless, this same utopia turns into a more prosperous prognostic when individuals discover and engage with DAI.

This decentralized peer-to-peer stable-coin arrived to render its holders the possibility of actually earning money with their savings.

By annually yielding a DAI Savings Rate (DSR) of 6% to its holders, DAI is able to have superiority over inflation and grant a palpable profitability in terms of savings. Thus, this article aims to explain some of the easiest ways you can secure your own DAI coins and enjoy from this exciting opportunity.

But… What Is DAI?

In 2015, the MakerDAO project initiated the development of a stable-coin that promised to introduce an unnatural attribute that rivaled those of the other established cryptocurrencies (E.g Bitcoin).

The attribute: reduce currency volatility. Indeed, for many crypto investors, the word “volatility” is enough to keep them awake at night. The fear of going to bed with a valuable portfolio, and waking up the other day to a colossal loss is quite pervasive. It is because of this thrilling fact that DAI came to serve as an antidote to the anxieties of many investors.

Formalized in 2017 and pegged to the American Dollar (1 DAI = 1 USD), the Ethereum-supported coin was born as a product of the DeFi (Decentralized Finance) phenomenon. Without any central authority holding control of it (i.e. no central bank, government or powerful agent involved), DAI is an unbiased coin backed by collateral assets.

The Maker protocol, which generates DAI, receives deposits of Ethereum-based assets that are deployed whenever DAI’s value deviates wildly from its normal range. Analogically, these collateral assets act as antibodies for atypical volatility in DAI and, thus, making it a stable coin for its holders. Maker explains that, “resistant to hyperinflation due to its low volatility, DAI offers economic freedom and opportunity to anyone, anywhere.”

Consequently, the coin not only became popular in the eyes of investors, but its peculiar and innovative features laid the foundation for a new future within the crypto ecosystem.

How Can You Secure DAI to Your Savings?

Individuals may obtain DAI coins through several ways. However, out of convenience, this article highlights the recommended procedure by MakerDAO to borrow and hold DAI through Oasis App:

Step 1

Visit the Oasis platform at “Oasis App” where you will choose the “Borrow” option.

Step 2

Connect Oasis to one of the soft or hard wallets. MetalMask is an excellent platform as it is a web browser extension. Therefore, you must download the MetalMask browser and create your wallet. (Tip: it is highly important to have your seed phrase recorded)

Step 3

Fund you wallet with fiat money by synchronizing your bank account to buy Ethereum.

Step 4

After connecting Oasis to your MetalMask wallet, start a vault to generate DAI. Select “Setup Vault” and confirm the transaction. At this point, the process may take sometime to conclude as it awaits the blockchain’s authentication.

Step 5

Deposit the amount in Ethereum you wish in the vault. Then, choose the amount of DAI you wish to generate.

Step 6

Review the transaction details, and accept the terms and conditions before opening the vault and finalizing the transaction.

Step 7

To check information on your savings earned to date and the current DAI Savings Rate, return to your profile homepage and select “Save.”

Step 8

Finally, deposit the amount of DAI you wish to earn the savings rate from. You will be able to see your savings rate incrementing in real time.

Conclusion

Although DAI’s DSR will constantly change throughout each year in response to community’s governance, it still provides a far better option for earning money with savings than leaving your money to decay with the traditional banks in the United States. Moreover, the speed and ease with which individuals can become involved with DAI and profit from it equalizes the playing field to everyone interest in securing this stable-coin.

In addition, DAI accentuates the obsolescence of our ancient banking system while providing freedom from the financial bondage bestowed upon us through a new savings alternative.

Lastly, DAI represents a leap into the future for the entire cryptocurrency ecosystem. Hopefully, in the near future, we will witness the rise of more stable-coins that will gradually disrupt the financial sector.

So, are you ready to dive into this promising financial opportunity? Secure your DAI coins now!

DISCLAIMER: Investing into cryptocurrency and DeFi platforms comes with inherent risk including technical risk, human error, platform failure and more. Please refer to our blog for more on mitigating your downside when using these protocols! Nothing we share on this platform is to be construed as financial advice, this is strictly educational content.

Thanks to our guest author, Bernardo for this post!

⚠️DISCLAIMER: Investing into cryptocurrency and DeFi platforms comes with inherent risk including technical risk, human error, platform failure and more. We are strictly an educational content platform, nothing we offer is financial advice. Please refer to our blog for more on mitigating your downside when using these protocols!

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