MakerDAO (DAI Stablecoin) Explained

NOWPayments
6 min readMar 6, 2023

Accept DAI payments

MakerDAO is a decentralized autonomous organization built on the Ethereum blockchain that has created a stablecoin called DAI. DAI is a unique stablecoin because it is not backed by a fiat currency or commodity, but instead by a collateralized debt position (CDP) system. This means that users can lock up their Ethereum as collateral to generate DAI, which is then pegged to the US dollar. The use of smart contracts ensures that the system is transparent and autonomous, making it a reliable and decentralized alternative to traditional stablecoins.

In this article, we will explore the role of MakerDAO and DAI stablecoin in the context of crypto payments. We will examine how this innovative technology can help to overcome the challenges of price volatility in cryptocurrencies and pave the way for more widespread adoption of digital payments.

What Is DAI Stablecoin?

DAI is a stablecoin that is created and managed by MakerDAO. Unlike traditional stablecoins, DAI is not backed by a fiat currency or commodity. Instead, it is generated by users who lock up their Ethereum as collateral in a collateralized debt position (CDP) system. This collateralized approach ensures that DAI maintains a stable value of $1 USD, regardless of market fluctuations. The system is transparent and decentralized, as smart contracts manage the creation and management of DAI. This makes DAI a reliable alternative to traditional stablecoins and enables more widespread adoption of cryptocurrencies for day-to-day transactions.

Accept DAI payments

MakerDAO Ecosystem Overview

Maker Protocol

Maker Protocol is the core product of MakerDAO, enabling users to generate DAI stablecoin by locking up collateral in a collateralized debt position (CDP) system. This collateralized approach ensures that DAI maintains a stable value of $1 USD, regardless of market fluctuations. Maker Protocol is a reliable and decentralized alternative to traditional stablecoins.

Oasis

Oasis is a decentralized exchange for trading ERC-20 tokens, including DAI. It allows users to trade their tokens without the need for intermediaries, providing a more secure and transparent trading experience.

MakerDAO Governance

MakerDAO Governance is a community-driven governance system for the Maker Protocol, enabling MKR token holders to participate in decision-making. The system is transparent and decentralized, allowing the community to make decisions regarding the future of the Maker Protocol.

Crypto payments, donations, and payouts

NOWPayments has support for DAI stablecoin, enabling merchants to easily accept and process DAI payments. With NOWPayments, businesses can accept DAI payments for their products and services, as well as receive donations and make payouts. NOWPayments provides a simple and secure payment solution that allows merchants to accept a variety of cryptocurrencies, including DAI, without the need for extensive technical knowledge. The integration of DAI on NOWPayments is a significant step towards increasing the adoption of DAI for day-to-day transactions, especially in the realm of crypto payments.

Accept DAI payments

How Can You Integrate DAI into Your Business?

Integrating DAI into your business using NOWPayments tools is a straightforward process. NOWPayments’ tools for accepting DAI include:

  • eCommerce plugins: These plugins are compatible with PrestaShop, WooCommerce, Magento 2, WHMCS, OpenCart, Zen Cart, Shopify, and Shopware.
  • Payment Link and a PoS terminal: Businesses can use a payment link and a virtual Point-of-Sale terminal.
  • Recurring Invoicing: Some companies may deploy special recurring invoices.
  • Custodial Recurring Payments: It allows companies to set up separate billing accounts for their customers and let them top up these accounts with the cryptocurrency of their choice.
  • API: NOWPayments’ versatile API enables businesses to create custom crypto payment solutions.
  • Payouts: You can send mass payouts as a salary, bonus, reward, or rebate automatically to as many addresses as you wish.

Here are the steps you need to take to create your Dai payment link:

  1. Register a NOWPayments account.
  1. Enter your public DAI crypto address.
  1. Press “Create payment link.”
  1. Enter the details of your payment link and click “Confirm.”
  1. You will receive a payment link that your clients will be able to use by simply scanning its QR code.

Conclusion

In conclusion, DAI stablecoin is an increasingly popular cryptocurrency that provides a stable alternative to traditional cryptocurrencies. By integrating DAI into their businesses using NOWPayments tools, merchants can accept DAI payments with ease, making it more convenient for customers to make payments using their DAI wallets.

FAQ

What is DAI crypto?

DAI is a decentralized stablecoin cryptocurrency that is pegged to the US dollar. Unlike other stablecoins, it is not backed by fiat currency but is instead generated by locking up collateral in a collateralized debt position (CDP) system within the MakerDAO ecosystem. This makes it a unique and decentralized alternative to traditional stablecoins.

Is DAI a good investment?

DAI is a stablecoin that aims to maintain a stable value against the US dollar, so it may be less volatile than other cryptocurrencies. However, like all investments, there are risks involved, and the value of DAI may fluctuate based on market conditions and other factors. It is important to consider your own investment goals and risk tolerance before deciding whether DAI is a good investment for you.

Where to buy DAI?

DAI stablecoin can be bought from various cryptocurrency exchanges and platforms. Some popular exchanges that support DAI trading include Binance, Coinbase, Kraken, and Bitfinex. Additionally, decentralized exchanges like Uniswap and Oasis also allow for DAI trading.

ChangeNOW is also a reputable platform to buy DAI. To buy DAI on ChangeNOW, you can follow these steps:

  1. Go to the ChangeNOW website and select DAI as the currency you want to buy.
  2. Enter the amount of DAI you want to buy and the currency you want to pay with.
  3. Enter your DAI wallet address to receive the DAI.
  4. Provide any additional information requested by ChangeNOW, such as your email address and payment details.
  5. Review the transaction details and confirm the transaction.
  6. Once the payment is confirmed, the DAI will be sent to your wallet address.

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NOWPayments

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