The post How to Buy Dai (DAI) by Sarah Horvath appeared first on Benzinga. Visit Benzinga to get more great content like this.
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Cryptocurrencies are known for their volatility, making them a risky investment choice. However, stablecoins like Dai offer a more stable alternative due to their backing by underlying assets, which helps mitigate price fluctuations. Dai stands out in the stablecoin landscape as it is uniquely backed by cryptocurrency rather than fiat currency. This enables it to maintain a peg to the US dollar while providing users the benefits of decentralized finance (DeFi). Discover how to buy DAI with our easy-to-follow guide!
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How to Buy Dai (DAI)
Here’s a step-by-step guide on how to acquire this popular stablecoin safely and securely.
1. Open an Online Account
The simplest way to purchase DAI is by opening an account with a cryptocurrency exchange that supports DAI token. Popular options include Coinbase, Binance, Kraken and Crypto.com. Dai is also available on a range of crypto brokers’ platforms, which means you’ll get to choose between multiple crypto brokers when you open your account.
To create an account, simply visit the website or app and look for the “Sign Up” or “Create Account option. Provide personal information like your name and email, and prepare to verify your identity with a government-issued ID.
2. Fund Your Account
Before you can buy or sell cryptocurrency, you’ll need to add a funding method to your account. Most platforms allow you to buy cryptocurrency using wire transfer from your bank account. Nowadays, more and more platforms are now allowing credit card or debit card purchases. Be sure that your correct funding method is linked and cleared before proceeding.
3. Purchase DAI
After you’ve set up and funded your trading account, it’s time to make your purchase. Most platforms offer you access to a multitude of order types, ranging from quick-executing market orders to strictly controlled limit orders. Select the type of order that you want to place and take a look at the current price of DAI. In most cases, the price will be almost exactly equal to $1 USD. Set a price and number of DAI that you’d like to purchase and submit your order through your trading platform.
Depending on current market conditions, it can take a few minutes to one hour to finish filling your order. Once successful, you’ll see your tokens in your exchange wallet.
What Is Dai?
Dai is a stablecoin that runs on the Ethereum network. A stablecoin is a cryptocurrency that provides investors with a much-needed safeguard against volatility by maintaining a consistent price by tying itself to an underlying asset. While cryptocurrencies like Bitcoin rise and fall as market demands change, stablecoins attempt to stay at a single price regardless of market conditions. In most cases, this value is $1 USD. This is why every crypto investor should learn how to buy DAI. Many crypto traders close their positions by selling their volatile cryptos for the stable DAI token or another stablecoin.
Most stablecoins are backed by fiat currency like the USD in bank accounts. Dai is different because it’s backed by fiat currency pegged to cryptocurrency collateral staked on the Maker Dai Stablecoin System. This provides investors with a more transparent stablecoin, as collateral assets held on the Ethereum network can be viewed publicly. Dai works closely with Ethereum as an ERC-20 token.
Brief History of Dai
Dai was developed by the team behind the MakerDAO and Maker Protocol instead of a single person or small group of individuals. MakerDAO is a decentralized autonomous organization that governs itself entirely based on smart contract executions. MakerDAO tokens (which trade freely on many cryptocurrency exchanges) act as governance tokens, providing investors with a future vote on development matters. These tokens function in much the same way as owning shares of stocks.
Dai was introduced in 2017. Its soft peg to the USD quickly caused it to become among the most popular Ethereum-based stablecoins. Dai is currently the 18th largest cryptocurrency project when measured by total market capitalization. The coin has a market capitalization of around $5.3 billion with a daily trading volume of around $75.2 million.
Where to Buy Dai (DAI)
Not sure where to get DAi? Consider a few of our favorite options that currently support Dai trading below.
earn free crypto
securely through Coinbase’s
website
Coinbase is one of the largest cryptocurrency exchanges by trading volume, serving customers in over 100 countries and supporting hundreds of crypto coins and tokens. The platform features a user-friendly interface with options like staking and earning, as well as a “learn and earn” feature where users watch educational videos and answer questions to earn crypto assets. Trading fees can be high on the basic platform, but users can access the advanced platform for free.
Best For
- Coinbase is best for beginners because of its user-friendly interface.
- The availability of over 30 products caters to the needs of traders of every mindset.
- Coinbase offers a learn and earn program.
- You can earn coins and tokens by watching tutorials and answering crypto-related questions. This platform lets you earn crypto just by spending your fiat via a debit card as you normally would when you use Coinbase’s Visa debit card.
- Offer a wide variety of altcoins.
- Ideal for new investors.
- Complicated fee structure
- Does not support margin trading (only 3x on Pro version)
get started
securely through Binance’s
website
Binance is the largest cryptocurrency exchange in the world by trading volume. In fact, it tops the ranks of cryptocurrency exchanges maintained by CoinMarketCap, which are ranked based on 24-hour trading volumes, exchange score and average liquidity. Binance triumphs over exchanges like Huobi Global and Coinbase, which follow closely in 2nd and 3rd places, respectively.
Previously based in Malta, the Binance Group is now based in the Cayman Islands. Binance has several locations and entities registered across the globe. In the United States, it’s known as Binance.US. The exchange in the U.S. uses the same cutting-edge technology and trading services as its global counterparts with the difference being U.S. regulatory compliance. It is operated by San Francisco-based BAM Trading Services.
Binance.US ranks 9th on CoinMarketCap’s list of the top 10 exchanges based on metrics like 24-hour trading volume, exchange score and average liquidity. Binance could be a good platform for you to invest in cryptocurrencies if you are a U.S.-based trader who trades frequently, doesn’t intend to pay high trading fees and needs access to a large number of cryptocurrencies.
Best For
- US Citizens
- Frequent day traders
- Users interested in Binance Smart Chain (BSC) and Binance Coin (BNB)
- Low trading fees
- Easy-to-use platform
- Wide selection of altcoins — it offers 51 cryptocurrencies apart from Bitcoin (BTC)
- Good customer service
- High liquidity because of large trading volumes
- Only residents of 43 states in the U.S. can trade on Binance.US. You cannot trade on this platform in New York, Connecticut, Hawaii, Texas, Vermont, Idaho and Louisiana
- Despite the wide selection of altcoins, the number of tokens offered on the U.S. platform is not comparable to the hundreds of choices available on the Binance global platform
- There is no option for telephonic customer support
Get Started
securely through Kraken’s
website
Kraken is one of the oldest cryptocurrency platforms in the crypto market, catering to both new and expert cryptocurrency traders. By supporting over 240 cryptocurrencies, including altcoins and meme coins, Kraken gives investors more choices along with deep liquidity. The platform ranks No. 1 in Europe in large order executions with over 35% market share. In February, the platform launched an institutional offering to provide solutions like spot and over-the-counter (OTC) trading, custody and staking.
Best For
- Traders looking for advanced features and analytics
- Investors seeking access to a wide range of cryptocurrencies
- Provides access to a broad range of major cryptocurrencies and altcoins
- Customizable order types, charts and leveraged futures trading
- Strong commitment to security and regulatory compliance
- Trusted by over 9 million clients in 190 countries
- Not available in all U.S. states — no services to New York and Washington residents
- You pay higher fees if you are not on Kraken Pro
- Multiple apps may be confusing to beginners
- Staking and rewards not available in the U.S.
get started
securely through crypto.com’s
website
Crypto.com strives to make cryptocurrency a part of everyday life by offering a full suite of services for crypto users. The company offers a Crypto.com App, Exchange, Visa Card, DeFi swap, DeFi Wallet, DeFi Earn, Crypto.com Price, staking, crypto lending, and many other services. What really sets them apart, however, is the combination of super low fees and incredibly generous rewards programs for their users.
Best For
- Traders who want access to a secure, low-cost cryptocurrency exchange
- Passive investors who want to earn interest on their balance without frequent trading
- Mobile investors who prefer to handle all their crypto needs via their phone or tablet
- Low fees
- High security
- One-stop shop for all your crypto needs (wallet, trading, spending, and more)
- Lots of ways to earn interest, rewards, and rebates
- Low privacy
- Customer service response time could be improved
How to Store DAI Safely
Now that you know how to buy DAI you need to know how to store it safely. A cryptocurrency wallet provides you with a personal set of keys that you can use to store your investments off your exchange of choice. As an ERC-20 token, you can store Dai on almost any wallet that supports Ethereum. There are two types of crypto wallets: hardware wallets and software wallets. Consider our favorite ERC-compliant wallets below if you aren’t sure where to begin.
- Best Hardware Wallet: Ledger
buy now
securely through Ledger Hardware Wallet’s
website
Launched in 2014, Ledger has transformed into a fast-paced, growing company developing infrastructure and security solutions for cryptocurrencies as well as blockchain applications for companies and individuals. Born in Paris, the company has since expanded to more than 130 employees in France and San Francisco.
With 1,500,000 Ledger wallets already sold in 165 countries, the company aims at securing the new disruptive class of crypto assets. Ledger has developed a distinctive operating system called BOLOS, which it integrates to a secure chip for its line of wallets. So far, Ledger takes pride in being the only market player to provide this technology.
Best For
- ERC-20 tokens
- All experience levels
- Easy to set up and use
- Supports more than 1,500 different digital assets
- Tamper proof
- Portable
- Long-lasting battery
- Bluetooth connectivity features
- Can be quite pricey
A hardware wallet is a USB-like device for storing tokens offline,. It offers better protection than software wallets, though at a higher cost. The Ledger Nano X is a top cryptocurrency cold storage device that securely stores private keys for Bitcoin, ERC-20 tokens and other assets offline. It connects to the Ledger Live app for managing transactions and can install up to 100 decentralized applications (dApps) for users interested in decentralized finance.
- Best Software Wallet: MetaMask
Software wallets are applications for desktops or mobiles that store cryptocurrencies using a private online wallet. While they are less secure than hardware wallets due to internet connectivity, they offer a free means to store investments off-exchange. These wallets typically support a wider variety of tokens since they are often open-source.
MetaMask is a free software wallet available as a browser extension and mobile app. It securely stores Ethereum and ERC-20 tokens. It offers a key vault and private keys for quick token transfers and allows users to connect with numerous decentralized apps without compromising personal information.
Trade or Sell Your DAI Tokens
Dai is intended as a store of volatility for investors in the cryptocurrency market. Holding Dai in the long-term won’t result in much of a return for investors, as the price is tied to a 1:1 ratio with USD through the Maker Dai Stablecoin System.
You can profit from an investment in Dai by strategically converting the stablecoin into an altcoin. Wait for that coin to rise in value and then converting back to Dai. As Dai maintains a consistent value, you can buy back into the project of your choice when prices fall again without losing money. This allows you to accumulate more tokens and see a return on your investment.
Current Crypto Prices
The cryptocurrency market can be very volatile. Though stablecoins like Dai are unlikely to see frequent changes in value, non-backed assets like Bitcoin, Ethereum and other altcoins can show high volatility. Understanding how the market is moving day-to-day can help you enhance your crypto trading and make the most out of your investments.
Learn more about the market at a glance with our chart below.
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Is DAI a Good Investment?
If you’re a new cryptocurrency investor, it can be confusing to understand the differences between altcoins and stablecoins. Stablecoins like Dai allow investors to access a stable resource when investing. This can be a crucial element for day trading and scalping in such a volatile market. If you’re considering becoming a short-term cryptocurrency investor, learn how to use stablecoins effectively before you enter the market. This will help you avoid fees that come with converting your coins to fiat currency each time you want to exit a trade position.
The post How to Buy Dai (DAI) by Sarah Horvath appeared first on Benzinga. Visit Benzinga to get more great content like this.