Learning the friendly way

If you're looking for a smart way to get more out of your money, here's a little insider tip: locking XTP tokens in the Tap app could be a game-changer. It’s a quick, no-fuss move that unlocks premium features, slashes your fees, and gives you access to exclusive perks (just for being a savvy user). We’re all about helping make your money work harder for you, without jumping through hoops.

Let’s talk about it: the power of premium tiers

Locking your XTP isn’t just about holding onto digital assets, it’s your key to real, everyday savings. Essentially, the more XTP you lock, the more perks you unlock. It really is just a straightforward tiered system that rewards you.

Real-world savings: where you'll see the difference

Lower trading fees

Every transaction costs less when you lock XTP for a premium account, creating significant savings for active traders. The higher your tier, the more you save on each trade, keeping more profits in your wallet where they belong.

Example: A trader making €10,000 in monthly transactions could save hundreds in fees annually by moving from Essential to Plus tier, and thousands by reaching Premier or higher tiers.

Cashback rewards that add up

Getting up to 8% Cashback on your purchases isn’t just a nice-to-have - it’s like getting a discount every time you spend. No extra steps, just more value back in your pocket.

• Coffee runs: Daily €5 coffee becomes €4.60 with the Prestige tier (8% back)
• Weekly groceries: €200 shopping trip returns €16 with Platinum tier (6% back)
• Major purchases: €1,000 electronics purchase gives you €40 back with Premier tier (4% back)

Even at the Plus tier (€300 worth of XTP locked), your 1.5% Cashback quickly adds up, especially for regular spenders.

Fee-free ATM withdrawals

Premium tiers include greater ATM withdrawal limits, saving you those pesky fees that add up quickly:

• Prestige: Unlimited free withdrawals
• Platinum: €1,000 free monthly withdrawals
• Other Premium Tiers: free monthly withdrawals up to €500.

This benefit alone can save hundreds annually for frequent travellers or cash users.

Foreign exchange rate advantages

As a premium member, you get access to exclusive exchange rates when you're travelling or shopping internationally. The higher your tier, the better the rates, meaning you can save big on every global purchase you make.

Maximising your XTP strategy

Step 1: Calculate your spending patterns

Analyse your monthly expenses across categories like everyday purchases, trading activity, and ATM usage to determine which tier offers you the best return on your locked XTP.

Step 2: Consider your lock-up timeline

The beauty of XTP locking is flexibility - you're not permanently parting with your assets but rather unlocking access to a full suite of premium features while still maintaining full control.. Note that the lock-in time frame is one year.

Step 3: Start your journey

Begin with a tier that matches your comfort level and upgrade as you experience the benefits firsthand:

1. Download the Tap app and verify your account
2. Buy your desired amount of XTP
3. Select Upgrade from the bottom menu on the home screen
4. Choose your desired plan and follow the instructions. 

Additional premium perks

Your locked XTP doesn't just save you money, it elevates your entire financial experience:

• Priority support: Direct access to premium fast track assistance when you need it 
• Higher spending limits: Up to €30,000 monthly card spending limits for Prestige members
• Exclusive market insights: Premium crypto market newsletters and insights
• Multi-currency capabilities: Seamless management of various currencies

The bottom line

Whether you're a casual user or power trader, there's a premium tier designed to put more money back in your pocket through reduced fees, enhanced Cashback, and exclusive benefits that add real value to your financial journey.

For those willing to stake their claim in the premium territory, the rewards are clear: reduced fees, elevated features, and an experience built for those who demand more from their money.

Leverage in crypto trading is like adding rocket fuel to your portfolio - it can send your profits soaring or it could turn your investment into a spectacular firework display that ends in ashes. If you've been wondering whether leveraged crypto trading is right for you, you're asking the right questions. The answer isn't a simple yes or no, but rather depends on your experience, risk tolerance, and trading strategy.

Let's dive deep into the world of leveraged crypto trading to help you make an informed decision that won't leave you crying into your empty wallet.

What is leverage in crypto trading?

Leverage in crypto trading allows you to control a larger position than your actual account balance would normally allow. Think of it as borrowing money from your exchange to amplify your trading power. When you use 10x leverage, for example, you can trade with $10,000 worth of crypto while only putting up $1,000 of your own money.

The key distinction here is between leverage and margin. Leverage is the ratio (like 2x, 5x, or 100x), while margin is the actual collateral you put down. If you want to open a $5,000 position with 5x leverage, you'd need $1,000 in margin as your initial deposit.

Leverage ratios can range from conservative 2x multipliers all the way up to eye-watering 100x or even 125x on some platforms. Higher leverage means higher potential returns, but also dramatically increased risk of liquidation.

How does crypto leverage trading work?

When you open a leveraged position, you're essentially borrowing funds from the exchange to increase your market exposure. The exchange holds your margin as collateral and charges you interest (funding fees) for the privilege of using their money.

Here's the basic mechanics: You deposit collateral, choose your leverage ratio, and open a position. The exchange monitors your account balance constantly. If your losses approach your margin amount, you'll face liquidation: the exchange automatically closes your position to prevent you from losing more than your collateral.

Leveraged crypto trading typically happens through futures contracts, perpetual swaps, or options. Perpetual swaps are the most popular choice, as they don't have expiration dates and closely track the underlying asset's price through funding rate mechanisms.

Real-world examples of leveraged crypto trades

Let's examine some concrete scenarios. Imagine you open a $1,000 Bitcoin position with 10x leverage when BTC is at $50,000. Your effective position size is $10,000, controlling 0.2 BTC.

Scenario 1: Bitcoin rises to $55,000 (10% increase). Your position gains $1,000, doubling your initial investment. 

Scenario 2: Bitcoin falls to $45,000 (10% decrease). Your position loses $1,000, and you're liquidated, losing your entire margin.

(side note: Some platforms liquidate before the full 10% drop due to maintenance margin + fees, often at around an 8–9% drop for 10x leverage.)

For a more conservative example, consider 5x leverage on Ethereum. With $500 margin and ETH at $3,000, you control $2,500 worth of ETH. A 15% ETH price drop to $2,550 would result in a $375 loss, leaving you with $125 margin and approaching liquidation territory.

These examples illustrate how small market movements translate to significant portfolio impacts with leverage, both positive and negative.

Types of leverage trading: isolated vs. cross margin

Understanding margin types is crucial for effectively managing your risk. 

Isolated margin confines your risk to individual positions, so if one trade goes south, it won't affect your other positions or remaining account balance. You allocate specific amounts to each trade, and that's all you can lose on that particular position.

Cross margin, on the other hand, uses your entire account balance as collateral across all positions. While this can prevent liquidation by automatically adding margin from your available balance, it also means a single bad trade could potentially wipe out your entire account.

Isolated margin is generally safer for beginners because it limits your maximum loss per trade. While cross margin offers more flexibility and can help avoid unnecessary liquidations, but requires more sophisticated risk management skills.

What are the risks of using leverage?

The biggest risk in leveraged crypto trading is liquidation, and crypto markets are notoriously volatile. Bitcoin can easily swing 5-10% in a single day. With 10x leverage, a mere 10% move against your position equals a 100% loss of your margin, triggering automatic liquidation.

Overleveraging is perhaps the most common mistake. The temptation to use maximum available leverage can be overwhelming, especially when you see potential profits multiplied by 50x or 100x. However, higher leverage means smaller price movements can destroy your position entirely.

Emotional trading becomes amplified with leverage. The stress of watching leveraged positions can lead to poor decision-making, revenge trading, and the dreaded "risk of ruin" (losing so much that you can't effectively continue trading).

The bottom line is that market volatility in crypto is extreme compared to traditional assets. While stocks might move 2-3% daily, cryptocurrencies regularly experience 10-20% swings. This volatility, combined with leverage, creates a perfect storm for rapid account destruction. You’ve been warned.

What are the advantages of using leverage?

Despite the risks, leverage offers compelling advantages for experienced traders. The most obvious benefit is amplified returns - a 5% Bitcoin price increase becomes a 50% profit with 10x leverage. This capital efficiency allows you to maintain significant market exposure while keeping most of your capital available for other opportunities.

Leverage also allows for sophisticated strategies like hedging and short selling. You can profit from falling prices by opening short positions, or hedge your spot holdings by taking opposite leveraged positions. This flexibility is particularly valuable during crypto bear markets when traditional buy-and-hold strategies struggle.

For traders with limited capital, leverage provides access to meaningful position sizes that wouldn't otherwise be possible. Instead of needing $10,000 to trade Bitcoin meaningfully, you might achieve similar exposure with just $1,000 and 10x leverage.

Should beginners use leverage in crypto trading?

The short answer for most beginners is: probably not. Leveraged trading requires a solid understanding of market dynamics, risk management, and emotional control - skills that take time to develop. The learning curve is steep enough without adding the pressure of potential liquidation.

However, if you're determined to experiment with leverage as a beginner, start extremely conservatively. Consider 2x or 3x leverage maximum, and only risk money you can afford to lose completely. Use an isolated margin to limit your downside, and never risk more than 1-2% of your total capital on any single leveraged trade.

The golden rule for beginners: master spot trading first. Understand market analysis, develop a trading strategy, and build emotional discipline before adding leverage to the equation. Think of leverage as advanced weaponry: you wouldn't hand a rocket launcher to someone who's never held a regular gun.

How to manage risk when using leverage

Effective risk management is the difference between profitable leveraged trading and blown accounts. 

We’ll say it time and time again: position sizing is paramount -never risk more than you can afford to lose, regardless of how confident you feel about a trade. A common rule is the 1% rule: never risk more than 1% of your account on any single trade.

Stop-losses are non-negotiable in leveraged trading. Set them before entering positions, not after you're already losing money. Also, calculate your risk-reward ratio beforehand; many successful traders aim for at least 2:1 reward-to-risk ratios.

Diversification becomes even more critical with leverage. Don't put all your leveraged positions in one crypto or market sector. Spread your risk across different assets and strategies to avoid catastrophic losses from single market events.

Is leveraged crypto trading legal and available everywhere?

The regulatory landscape varies dramatically by jurisdiction. In the United States, leveraged crypto trading faces significant restrictions. Most major exchanges don't offer high leverage to U.S. residents, and some derivative products are completely unavailable.

International traders typically have access to much higher leverage ratios and more diverse trading products. However, this comes with less regulatory protection and potentially higher platform risk.

Always verify your local regulations before engaging in leveraged crypto trading. Some countries have banned crypto derivatives entirely, while others impose strict leverage limits or require special licensing for platforms offering these services.

Final verdict: should you use leverage when trading crypto?

So, should you use leverage when trading crypto? It depends entirely on whether you're ready to handle a double-edged sword that's sharper than most traders realise.

Leverage makes sense if you've already proven yourself profitable in spot trading, have ironclad risk management skills, and can sleep soundly while your positions swing wildly overnight. It's a tool for enhancement, not salvation.

Skip leverage if you're new to crypto, emotionally driven in your trading decisions, or using money you actually need for rent and groceries. The markets will still be here when you're ready.

The bottom line: crypto offers opportunities without adding leverage to the mix. Master the fundamentals first, then consider leverage as a precision instrument, not a lottery ticket. The goal isn't to hit home runs on every trade; it's to stay in the game long enough to compound your skills and capital over time.

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Built on the idea that movement has value, SWEAT turns your daily steps into digital currency. Whether you’re heading to the coffee shop or chasing your dog around the park, this app quietly rewards you for staying active, a novel approach to merging fitness and crypto.

This revolutionary approach to fitness motivation is being called "Move-to-Earn" (M2E) technology. Built on the foundation of the popular Sweatcoin app, which has attracted over 120 million users worldwide, SWEAT transforms your daily steps into actual crypto that holds real-world value.

The concept is beautifully simple: the more you move, the more SWEAT tokens you can earn. But unlike traditional fitness apps that offer points or badges, SWEAT tokens can be traded, staked for additional rewards, or used to purchase real goods and services. It's part of the broader Sweat Economy – an ecosystem designed to make healthy living financially rewarding.

For the realists wondering how this is made possible, let’s get into it. 

How does Sweat Token work?

The intriguing concept behind SWEAT lies in its seamless integration between physical activity and blockchain technology. Here's how the system operates:

Step Tracking and Verification 

The Sweatcoin app uses your smartphone's built-in sensors or connected wearable devices to track your steps. Using sophisticated algorithms to verify that your movement is genuine, it distinguishes between actual walking and artificial movement like shaking your phone.

Minting SWEAT Tokens 

Once your steps are verified, the app converts them into SWEAT tokens through a process called "minting." Initially, users could mint 1 SWEAT token for every 1,000 verified steps. However, this rate gradually decreases over time as part of the tokenomics design to maintain scarcity and value.

Blockchain Integration 

SWEAT operates on the NEAR Protocol blockchain, known for its speed and low transaction fees. When you mint SWEAT tokens, they're automatically transferred to your Sweat Wallet – a built-in crypto wallet that makes managing your tokens straightforward, even for crypto beginners.

Unlike other Move-to-Earn platforms that demand expensive NFT purchases to get started, SWEAT is free to begin earning.

Sweat Token tokenomics explained

Let’s take a look at SWEAT’s launch and distribution, total supply structure, minting decay schedule and burning mechanisms. Understanding SWEAT's economic model helps evaluate its long-term potential:

SWEAT launched in September 2022 with no initial coin offering (ICO) or pre-sale. Instead, SWEAT were distributed 1:1 to pre-existing Sweatcoin users via a token generation event, with a total supply capped and a minting schedule that decays over time to ensure scarcity.

Initially, 1,000 steps yielded 1 SWEAT, but this rate has reduced (e.g. ~0.33 SWEAT after one year, with plans for further reductions). 

And lastly, the ecosystem includes staking rewards that encourage holding tokens rather than immediate selling. Additionally, certain activities may burn tokens, removing them from circulation permanently.

Sweatcoin vs SWEAT

This distinction often confuses newcomers, so let's break it down clearly:

Sweatcoins are the original in-app currency that Sweatcoin users have been earning since 2016. These points exist only within the Sweatcoin app and can be spent in the app's marketplace on various products and experiences.

SWEAT tokens, launched in September 2022, are actual cryptocurrency that exists on the blockchain. They have real market value and can be traded on trading platforms, staked for rewards, or used across the broader Sweat Economy ecosystem.

Think of Sweatcoins as arcade tokens that only work in one specific arcade, while SWEAT tokens are like actual money that you can use anywhere that accepts them. Both currencies coexist - you can continue earning Sweatcoins for in-app purchases while simultaneously earning SWEAT tokens for broader crypto utility.

Real-world uses of SWEAT Tokens

Let’s explore SWEAT tokens use cases outside of the Sweat Economy ecosystem:

• Marketplace Purchases: The Sweat Economy marketplace offers real products and services that you can purchase directly with SWEAT tokens. From fitness equipment to wellness products, the marketplace continues expanding its offerings.
• Staking for Passive Income: You can stake your SWEAT tokens to earn additional rewards over time. This process involves locking up your tokens for a specified period in exchange for earning more SWEAT tokens as interest.
• Charitable Donations: The platform enables users to donate their SWEAT tokens to various charitable causes, adding a philanthropic dimension to one’s daily fitness routine.
• Gaming and NFTs: The Sweat Economy includes gaming elements and NFT collections that can be purchased or earned using SWEAT tokens, adding a gamefying element.
• Brand Partnerships: SWEAT tokens can be used with various fitness and wellness brands that have partnered with the Sweat Economy, expanding the utility beyond the core app.

How to earn SWEAT Tokens

Getting started with earning SWEAT is refreshingly simple:

• Download the Sweatcoin app from your device's app store and create an account. The app will guide you through connecting your step tracking permissions.
• Go about your daily activities - walking to work, taking the stairs, going for a jog, or any other movement that generates steps. The app runs in the background, automatically tracking your activity.
• Each day, you can mint SWEAT tokens based on your verified steps. The current rate varies due to the decay mechanism, but historically started at 1 SWEAT per 1,000 steps.

There are also several other ways to increase your SWEAT earning potential:

• Complete daily challenges and achievements
• Refer friends to join the platform
• Participate in special events and promotions
• Maintain consistent daily activity streaks

The platform implements daily minting limits to prevent abuse, but these limits can be increased through various engagement activities within the app.

Storing and managing your SWEAT Tokens

The easiest way to manage your SWEAT tokens is through the Sweat Wallet, automatically created when you start earning (no setup or technical know-how required). For those who prefer more control, SWEAT can also be stored in any NEAR-compatible wallet, like NEAR Wallet.

Whichever option you choose, security is key. Always enable two-factor authentication and never share your private keys or recovery phrases. While the Sweat Wallet includes built-in protections, staying vigilant is essential.

Where and How to Buy SWEAT Tokens

While earning through movement is the primary method, you can also purchase SWEAT tokens directly through centralised exchanges (CEX) and, for those comfortable with DeFi, on decentralised exchanges (DEX) within the NEAR ecosystem. 

Always research exchanges thoroughly and start with small amounts if you're new to crypto trading.

To stay on the safe side, keep an eye on Tap - an announcement is coming that could put SWEAT firmly on your radar.

Is Sweat Token safe? Looking at security and privacy 

Data privacy 

Sweatcoin has built its reputation on user privacy. The app collects step data and location information necessary for verification, but has implemented strong privacy protections. Users maintain control over their data sharing preferences.

Fraud prevention 

Be warned: the platform uses sophisticated anti-fraud mechanisms to prevent fake step generation. Machine learning algorithms analyse movement patterns to identify and prevent cheating attempts.

What data is collected vs shared 

The app collects step counts, basic movement patterns, and location data for verification purposes. However, personal health data isn't shared with third parties without explicit consent, and users can opt out of data sharing for marketing purposes.

Blockchain security 

Operating on the NEAR Protocol provides inherent security benefits through blockchain technology, including transparent transactions and decentralised validation.

M2E Movement: Sweat Token vs STEPN

Comparing SWEAT to STEPN, another popular Move-to-Earn platform, reveals important distinctions:

Entry Barriers 

STEPN requires purchasing expensive NFT sneakers (often $500-2000) to begin earning, while SWEAT is completely free to start.

Token Utility 

STEPN focuses heavily on NFT trading and upgrading, while SWEAT emphasises real-world utility through marketplace purchases and staking.

Monetisation Approach 

STEPN operates more like a game with complex mechanics, while SWEAT maintains simplicity and accessibility for mainstream users.

The choice between platforms often comes down to whether you prefer high-barrier, high-reward gaming (STEPN) or low-barrier, steady-reward fitness motivation (SWEAT).

Pros and Cons of Sweat Token

Advantages

• Zero Entry Cost: No upfront investment required to start earning
• Health Benefits: Encourages genuine physical activity and wellness
• User-Friendly: Simple interface accessible to crypto newcomers
• Real Utility: Tokens have actual use cases beyond speculation
• Large User Base: Built on proven Sweatcoin platform with millions of users
• Established Partnerships: Growing ecosystem of brand partnerships

Potential Drawbacks

• Token Inflation: Continuous minting may pressure token value
• Earning Limits: Daily minting caps limit earning potential
• Market Volatility: Like all cryptocurrencies, SWEAT price can fluctuate significantly
• Sustainability Questions: Long-term viability depends on user retention and ecosystem growth

Conclusion

Sweat Token combines fitness and crypto by rewarding daily movement with digital currency, making it an accessible entry point into Web3. With no upfront cost and real-world utility through staking and marketplace rewards, it appeals to both fitness enthusiasts and crypto newcomers. Its long-term success will depend on user engagement and expanding utility, but its low barrier to entry and alignment with everyday habits give it strong growth potential.

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Livepeer is a decentralised video streaming network that aims to make video content more accessible and affordable for everyone. Launched in 2017, it was the first fully decentralised live video streaming network protocol, offering an alternative to traditional centralised streaming services like YouTube and Twitch.

The platform works by connecting video creators who need their content processed with computer operators who provide the computing power. This peer-to-peer approach can reduce streaming costs by up to 50-90% compared to traditional cloud providers while maintaining high quality and reliability.

TLDR

Decentralised video infrastructure: Livepeer is a decentralised network for limitless video computing, enabling AI processing and transcoding jobs to power the future of video.

Cost-effective streaming: Designed to make streaming more reliable while reducing costs, Livepeer acts as a decentralised marketplace for developers building applications that integrate live video and transcoding providers.

Ethereum-based protocol: Built on Ethereum, it aims to provide a blockchain-based alternative to centralised streaming services, giving developers freedom to innovate and creators independence from big platforms.

Native token (LPT): The Livepeer Token (LPT) is the protocol token of the Livepeer network, used for staking and network governance rather than direct payments.

What is Livepeer (LPT)?

Livepeer creates a global network where anyone can contribute computing power to help process video content. When someone wants to stream a video, instead of using expensive centralised servers, the content gets distributed across this network of independent computers.

The magic happens through video transcoding: the process of converting video files into different formats and quality levels so they can be watched on different devices and internet speeds. Traditional streaming services handle this with massive, expensive data centres. Livepeer does it through thousands of smaller computers around the world.

This approach benefits everyone involved. Content creators get cheaper streaming costs, computer operators earn money for contributing their resources, and viewers get the same high-quality experience they expect from streaming platforms.

The network is particularly valuable for developers building video applications, as they can tap into Livepeer's infrastructure without setting up their own expensive video processing systems.

Who created Livepeer?

Livepeer was founded in 2017 by Doug Petkanics and Eric Tang, both entrepreneurial software engineers who had been long-time collaborators before starting the project.

Doug Petkanics serves as CEO and brings over 10 years of experience as an entrepreneur and software developer. Before Livepeer, he was a co-founder and VP of Engineering at Wildcard and attended the University of Pennsylvania.

Eric Tang, who serves as CTO, co-founded Livepeer to utilise blockchain technology to reduce costs and increase efficiency in video streaming. The platform has grown significantly under their leadership, now featuring more than 70,000 GPUs that encode videos for large platforms.

The founding team recognised that video streaming was becoming increasingly expensive and centralised, with a few big companies controlling most of the infrastructure. They set out to democratise video streaming by creating a decentralised alternative that could compete on both cost and performance.

How does Livepeer work?

Video transcoding network

The core of Livepeer is its video transcoding network. When someone uploads a video, it needs to be converted into multiple formats and quality levels (like 1080p, 720p, 480p) so it can be watched on different devices and internet connections.

Instead of using one large data centre, Livepeer distributes this work across thousands of computers worldwide. These computers, called "orchestrators," compete to provide the best service at the lowest cost.

Staking and network security

Computer operators who want to join the network must stake LPT tokens as a form of security deposit. This ensures they'll do good work; if they provide poor service or try to cheat, they can lose their staked tokens.

Users can also "delegate" their LPT tokens to trusted orchestrators, earning a share of the rewards while helping secure the network without running their own hardware.

Economic incentives

The network creates a marketplace where video processing jobs go to the orchestrators offering the best combination of price, quality, and reliability. This competition naturally drives down costs while maintaining high standards.

Payments for video processing are typically made in ETH or other cryptocurrencies, while LPT tokens are used for staking and governance rather than direct transactions.

What Is LPT?

LPT is a staking token in the Livepeer Network that helps reduce costs for video broadcasters. Unlike many crypto tokens, LPT isn't primarily used for payments, it also provides:

• Network security: Orchestrators must stake LPT tokens to participate in the network, ensuring they provide reliable service.
• Governance rights: LPT holders can vote on important network decisions and protocol upgrades.
• Delegation rewards: Token holders can delegate their LPT to orchestrators and earn a portion of the fees those orchestrators collect.
• Work token: LPT represents the right to perform work on the network and earn fees from video processing jobs.

The token follows an inflationary model where new LPT is created to reward network participants, but this inflation is balanced by the value created through network usage and growth.

How can I buy and sell LPT?

If you're interested in exploring LPT, you can do so easily through the Tap app. The app supports buying, selling, trading, and storing LPT tokens, allowing verified users to manage LPT alongside other digital assets.

When considering LPT investment, it's important to understand that the token's value is closely tied to the network's adoption and usage. As more developers and content creators use Livepeer's infrastructure, the demand for LPT staking and the overall network value should increase accordingly.

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One of the first stablecoins to come into existence, Dai was launched in 2017 and is maintained and regulated by MakerDAO. Using a series of smart contracts, Dai maintains a value of $1, or very close to it. Due to the coin’s soft peg to the US dollar, the Dai stablecoin not only provides a stable long-term store of value but also a strong medium of exchange. 

Let’s explore what Dai is and how it contributes to the crypto ecosystem. 

What Are Dai tokens?

Dai is an ERC-20-based stablecoin pegged to the US dollar. While more stablecoins hold the fiat currency to which they are pegged in reserves, the Dai stablecoin instead uses several cryptocurrencies to ensure it holds its peg. 

Supported cryptocurrencies include Ethereum (ETH), (BAT), USD Coin (USDC), Wrapped Bitcoin (wBTC), Compound (COMP), and many more. With a wide range of collateralized cryptocurrencies, user risk is decreased and Dai's price stability is increased.

Dai is issued and operated by the Maker Protocol and the MakerDAO (decentralized autonomous organization). Designed to provide a means of lending and borrowing crypto assets, the Dai stablecoin was at the forefront of the DeFi revolution. 

Holders of Dai can also earn interest. The platform also has another coin, MKR, which allows holders to set the Dai Savings Rate (DSR) and act as guarantors for Dai. This ensures that MKR tokens can be liquidated if the system fails. This structure motivates guarantors to ensure that the Dai system and its collateralized coins operate properly.

How do you generate Dai?

Users can generate Dai by paying collateral assets. Dai is created when users deposit ETH or any supported cryptocurrency as collateral. The equivalent amount of Dai is then issued and the user will receive Dai tokens.

If the Dai holders want the collateral assets back, the borrowed Dai can be paid back (plus a stability fee) and the collateral assets will be released. This Dai is then removed from circulation.

History of the Dai Stablecoin

The MakerDAO was first launched in 2015 by Rune Christensen and is the longest-running protocol on the Ethereum blockchain to date. It holds more than 2.3 million ETH in its protocol, approximately 2% of Ethereum’s total supply.

When first created, only Ether could be used as collateral, however, in 2019 more cryptocurrencies were added to this list. The Dai price has always been soft pegged to the US dollar.

How Does DAI Work?

The Dai cryptocurrency is an ERC-20 token that can be bought on both centralized and decentralized exchanges (DEXs). Users can also generate and borrow Dai by using MakerDAO's Oasis Borrow dashboard to establish a Maker collateral vault and put Ethereum-based assets in as collateral.

In its original use, the Maker protocol stored collateral in smart contracts known as maker collateral vaults. These smart contracts held collateral in escrow until the borrowed Dai was repaid, also known as collateralized debt positions (CDPs). The value of the security you send always exceeds the amount of DAI you receive otherwise the collateral will be liquidated. 

The Dai platform is one of the most integrated digital assets in the blockchain industry and can be utilized across decentralized finance (DeFi) applications and blockchain-based games, among other places.

The Advantages of DAI

No Minimum Amount Required

There is no minimum account balance required to use DAI, as there is with most other types of money. A lot of people around the world do not have the minimal amount of assets needed in order to qualify for a bank account, but there is no minimum balance requirement for utilizing DAI.

Price Stability

DAI can serve as a safe alternative store of money and access to financial inclusion for people who live in places where the economy is unstable.

Decentralized Financial Inclusion (smart contracts)

As DAI is a transparent and permissionless system, it allows users to have greater freedom over their money. Zimbabwe and Myanmar, for example, have been recognized as countries where people are limited in their ability to access fiat currency due to daily or monthly withdrawal restrictions on bank accounts imposed by the government.

Passive Income

Users can use DAI tokens to earn money through lockup and interest generation through the DAI Savings Rate system. Because DAI is based on the Ethereum blockchain, it doesn't have its own staking mechanism.

Owners of DAI tokens, on the other hand, may profit by putting DAI into a MakerDAO smart contract. This unique smart contract system protects the user's money and allows for immediate withdrawal.

Quick And Cost-Effective Transactions

In many cases, international wire transfer fees can be extremely high, and the time it takes to complete a transaction might be inconvenient. Global transactions between two users' wallets are made more transparent and efficient due to DAI's low transfer fees and quick processing times.

Operates 24/7

Traditional financial institutions operate only during "business" hours. As a result, transactions through such organizations may be delayed for days and will only finalize after banking institutions are open and transfers have been completed. Transactions can now be completed at any time of the year and on any day of the week using DAI and the Ethereum blockchain.

Continuously Vetted

The MakerDAO system has been found to conduct thorough checks and studies in order to guarantee the platform's security. Developers formally validate all smart contracts and core protocol elements that make up the system's internal architecture through mathematical analysis. Always DYOR (Do Your Own Research) and fully understand any DeFi protocol before using it.