fromHackernoon
1 month agoInside DAI: The Crypto Dollar That Defends Itself with Code | HackerNoon
DAI operates by enabling users to lock collateral in a smart contract, a process known as opening a Collateralized Debt Position (CDP). This ensures over-collateralization, usually requiring a collateral value exceeding the DAI's value by at least 150%. This buffer is crucial for absorbing market volatility and maintaining the peg to the US Dollar.
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