Cryptocurrencies are speculative investments with a high degree of risk. Stablecoins, which are backed by an underlying asset, can help you keep your portfolio stable while investing in the cryptocurrency market. Dai is a one-of-a-kind stablecoin in the stablecoin world, as it is the first to be backed by crypto. This Dai beginner’s guide will assist you in learning more about the coin and adding it to your portfolio.

Dai is an Ethereum-based stablecoin. A stablecoin is a cryptocurrency that offers investors a much-needed hedge against volatility by attaching itself to an underlying asset and maintaining a consistent price. Stablecoins seek to maintain a fixed price regardless of market conditions, whereas cryptocurrencies like Bitcoin rise and fall as market demands change. In the vast majority of cases, this amount is $1.

The majority of stablecoins are backed by fiat currency, such as the US dollar held in bank accounts. Dai differs from other stablecoins in that it is backed by fiat cash that is pegged to cryptocurrency collateral held on the Maker Dai Stablecoin System. As collateral assets maintained on the Ethereum network can be viewed openly, this provides investors with a more transparent stablecoin. 

How to Buy dai 

The following provides a step-by-step guide on how to buy Dai

Open an online account

The most straightforward approach to buying Dai is to register an account with a crypto broker that accepts the coin. Dai is offered on a variety of broker platforms, so when you open an account, you’ll be able to choose from some different brokers. Consider these factors while choosing a broker:

• Each broker’s trading platform
• Fees and commissions
• Local availability
• Additional coins available to purchase and sell

Buy a wallet

After choosing a broker, you’ll need to set up a private wallet for your tokens. A cryptocurrency wallet provides you with a unique set of keys that you may use to store your bitcoin investments on the exchange of your choice. Cryptocurrency wallets are classified into two types:

Hardware wallets are USB-like device that allows you to keep your tokens offline. As opposed to software wallets, hardware wallets are more expensive, but they give a higher level of security for your tokens.

Software wallets are desktop or mobile programs that store tokens and money securely online. Though software wallets aren’t as safe as hardware wallets (because they require internet access to access your investments), they do offer investors a free method to keep their assets outside of the exchange. When compared to hardware wallets, software wallets are usually open-source, which means they support a wider range of tokens.

Dai may be stored in practically any Ethereum wallet that supports ERC-20 tokens. Check out our list of ERC-compliant wallets for more ideas.

Make your purchase

It’s time to make your buy after you’ve set up both your trading account and your wallet. Although the exact methods will differ according to the broker, here are the basic stages to purchase DAI:

Deposit into your brokerage account

Before you may purchase or trade cryptocurrencies, you must fund your brokerage account. Most brokers allow you to acquire cryptocurrencies with a direct bank transfer, but an increasing number of them are also accepting credit and debit card payments. Before continuing, verify that the relevant financing method has been linked and cleared.

Decide on the type of order you wish to place

The majority of brokers offer a range of order types, from quick-acting market orders to highly limited limit orders. Choose the sort of order you wish to place and check out the current DAI pricing. In most circumstances, the cost will be nearly identical to $1.

Complete and submit your order

Set a price and quantity, then place an order on your trading platform. Now you can sit back and relax, secure in the knowledge that your broker will execute your order under the limits and settings you selected.

Your broker may take anything from a few minutes to an hour to complete your order, depending on current market circumstances. When your broker completes the order, your tokens will appear in your exchange wallet. Your broker will either leave the order open indefinitely or close it at the end of the trading day if they are unable to fill it.

It can be difficult to tell the difference between altcoins and stablecoins if you’re a rookie cryptocurrency investor. In such a turbulent market, stablecoins like Dai provide investors with a stable resource to invest in, which might be critical for day trading and scalping.

Learn how to use stablecoins efficiently before you enter the market if you’re thinking about becoming a short-term cryptocurrency investor. This will save you money by avoiding the fees associated with changing your cryptocurrencies to fiat currency each time you wish to close a trade.