Federica
Thu May 16 2024
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6 answers
1087
How does DAI stay pegged?
Could you explain how DAI manages to maintain its pegged value? I'm quite fascinated by the stability mechanisms behind decentralized finance. DAI, as a stablecoin, seems to have a unique approach to maintaining its value despite the volatile nature of cryptocurrencies. I'd like to know more about how its system works, particularly the collateralized debt positions and the role of MakerDAO in ensuring DAI's stability. How does the system adjust supply and demand to keep DAI pegged to the dollar? And what happens when there are market fluctuations? I'm keen to understand the intricacies of this mechanism and how it differs from other stablecoins in the market.
