Dai is a stablecoin governed and maintained by a decentralized autonomous organization(DAO). It is an ERC20 token issued on the Ethereum blockchain through smart contracts with a value of 1USD. This stablecoin aims to keep its value close to the US dollar by utilizing smart contracts on the Ethereum blockchain.
All +/- % changes are for a 24 hour window
## History of DAI
Dai was officially launched on the main Ethereum network on December 18, 2017. Before then, the decentralized firm that runs the operations of the token, MakerDAO, was formed by __[Rune Christensen](https://dk.linkedin.com/in/runebentsenchristensen)__, a Danish entrepreneur, in 2014. For the first year of its existence, the price of Dai stayed at one dollar even when the price of Ether fell by about 80% during the same period.
The fortunes of Dai as a token turned around when venture capital business __[Andreessen Horowitz](https://a16z.com/)__ raised $15 million into MakerDAO. To help bootstrap its ecosystem, MakerDAO established the Maker Foundation, thus strengthening the liquidity of the stablecoin.
In 2019, an internal crisis rocked MakerDAO on whether or not it should be more integrated with traditional financial institutions. This development led to the departure of MakerDAO's CTO. At the onset of the pandemic in March 2020, Dai experienced a spiral that caused it to trade for USD 1.11 before it returned to its intended $1.00 valuation.
## Biggest Claims to Fame
Dai, which was launched in December 2017, allowed users to leverage their ETH to create a stablecoin that keeps price valuation at $1 for most of the time. By doing so, MakerDAO contributed substantially to the growing interest of crypto investors in the stablecoin.
Due to the success of Dai, MakerDAO became the most popular Ethereum based system in 2019. By market capitalization, Dai stays ahead of other stable coins like GUSD, USDT, and USDC. One reason for this is that, unlike most stable coins, Dai is not backed by fiat reserves held in a bank. Thus, the transparency of this stablecoin can be seen on-chain at all times.
Dai also eliminates the costs of international transactions, which are always relatively high and so foreign exchange volatility can be mitigated.
## Biggest Criticisms of DAI
Dai is a popular subject in the crypto world as most crypto lovers love the concept of a liquid stablecoin. However, critics believe that the project could fall victim to the same scenario that caused Ethereum's first DAO to lose $50 million in June 2016. At that time, users exploited the DAO's code which allowed them to divert one-third of funds to a subsidiary account. To support this criticism, the Dai stablecoin has been facing several challenges, including the crash it experienced in 2020.
Another major hurdle for the __[MakerDAO](https://makerdao.com/en/)__ and Dai is the government-specific agencies that regulate financial activities in the U.S. It also seems very unlikely that the US Treasury would stand by while the stakeholders of Dai create and grow a synthetic dollar system.
Finally, the Maker Foundation, a non-profit body, is seen as a single point of failure. The logic to this is that regulatory authorities could pressure the Foundation, and people are skeptical as to how long development activities can be sustained.
## The Team Behind DAI
MakerDAO, the enterprise behind the Dai stablecoin, comprises CEO Rune Christensen, CTO Andy Milenius, President Steven Becker, and eighteen other leaders. Rune Christensen founded TryChina, a company devoted to international recruiting, in 2011. Christensen left TryChina in 2014 and founded MakerDAO in March 2015.
Andy Milenius ceased to be the CTO in 2019 due to a conflict of ideas. Steven Becker previously owned and managed a diversified financial company. He had also been a market risk manager before joining MakerDAO.
## In Conclusion
Even with all the challenges of Dai, the prices of this coin will continue to rise. This is due to the developers' aim of making the stablecoin an unbiased global currency which would be the first of its kind.
In addition, the team plans to create a globally recognized logo as a symbol of the token just like Euro, USD, and Pounds symbols. MakerDAO also continues to rake in lots of Ethereum as the firm plans to create the world's first working consumer-grade stablecoin, which would be based on collateralized crypto assets.