DAI is a stablecoin based on Ethereum (a cryptocurrency with a stable price), the release and development of which is managed by the Maker protocol and the decentralized autonomous organization MakerDAO.

The price of DAI is gently pegged to the US dollar and is backed by a set of other cryptocurrencies that are deposited into smart contract vaults each time a new DAI is issued.

It is important to distinguish between DAI with multiple collateral, and DAI with one collateral (SAI), an earlier version of the token that could only be backed by one cryptocurrency. SAI also does not support the DAI savings rate, which allows users to earn savings by storing DAI tokens.

The multi-party DAI was launched in November 2019.

One of the distinctive features of the project is that it was not created by any one person or a small group of co-founders. Instead, the development of the software it runs on and the issuance of new tokens are regulated by the MakerDAO and Maker protocols.

MakerDAO is a decentralized autonomous organization, a kind of company that operates in a decentralized way through the use of smart contracts - self-acting agreements expressed in software code and executed on the Ethereum blockchain.

This organization is democratically run by the holders of its Maker Management Tokens (MKR), which act similarly to the shares of a traditional company. MKR holders can vote on key decisions related to the development of MakerDAO, Maker Protocol, and DAI, with their voting rights proportional to the number of Maker tokens they own.

MakerDAO itself was originally founded by Danish entrepreneur Rune Christensen in 2015. Before starting work on the Maker ecosystem, Christensen studied biochemistry and international business in Copenhagen, and founded the international recruitment firm Try China.

The main advantage of the asset is its soft peg to the price of the US dollar.

The cryptocurrency market is notoriously volatile: even the largest and most highly liquid coins, such as Bitcoin, sometimes experience price changes (both up and down) of 10% or more in a single day. In these circumstances, traders and investors are naturally predisposed to add safe assets to their portfolios, the stable price of which can help compensate for significant market fluctuations.

One such asset is stablecoins, one example of which is DAI. These are cryptocurrencies whose price is tied to assets with a relatively stable value, and most often these are traditional fiat currencies, such as US dollars or euros.

Another key advantage of DAI is the fact that it is managed not by a private company, but by a decentralized autonomous organization through a software protocol. As a result, all cases of token issuance and burning are managed and publicly recorded using self-regulating smart contracts based on Ethereum, which makes the entire system more transparent and less susceptible to corruption.

In addition, the software development process is regulated more democratically, by direct voting of permanent participants of the token ecosyste.

New DAI tokens are not produced through mining, like Bitcoin and Ethereum, and are not created by a private company in accordance with its own emission policy, such as Tether (USDT). Instead, a new DAI can be created by any user using the Maker protocol.

As of January 2021, there are more than 1 billion DAI coins in circulation. There is no upper limit for the total number of DAI: the offer is dynamic and depends on how much collateral is stored in the vaults at any given time. 

DAI is an Ethereum-based token that is compatible with ERC-20. Thus, it is protected by the Ethereum Ethash algorithm.