No, DAI crypto is not a good investment. Not in the traditional sense in any case. DAI crypto is a stablecoin whose value is pegged to that of the US dollar. This means that 1 DAI will always equal $1. So if you invest your money in DAI you cannot expect the value of this investment to go up through price appreciation.
If you this is news to you then you probably need to brush up your knowledge about crypto. You can do that by reading the articles on this site. It’s free.
If you want to really understand DAI then I highly recommend you read my article titled “What is DAI crypto.“
Having said that, there is one way you can earn a return on your DAI
How to earn a return on your DAI
The protocol that issues DAI, MakerDAO, does offer a savings product. If you send your DAI to their savings smart contract they will reward you with an interest rate just like you would get at a bank. Currently you can earn around 7% per year which is way higher than what you can get in a normal high street bank. You can withdraw your DAI at any point in time. From this perspective parking your money in DAI crypto is a superb investment.
Where can I save DAI ?
There are a bunch of dapps where you can take advantage of the DAI savings scheme. The one that is built and maintained in-house by the MakerDAO team is oasis.app. But there are a bunch of others such as Instadapp, Zerion, or MyEtherWallet.
How do I get DAI crypto?
There are two ways you can get DAI.
The first is to buy it on any exchange. Most major exchanges allow you to purchases DAI
The second is to borrow it by putting up collateral on MakerDAO. If you supply MakerDAO with say $150 worth of ETH then you can borrow up to 100 DAI. You will have to pay back the principal and an interest rate in order to get your ETH back. You can supply multiple crypto assets. It doesn’t have to be ETH
I don’t mean DAI, I mean the governance token of MakerDAO
Oh right. The governance token of MakerDAO is called MKR. The initial issuance was 1Mn MKR but this is getting burnt over time. You can’t do much with MKR apart from use it to vote on proposals put forward by members of the DAO. I have seen some valuation models that equate these tokens to shares and use traditional valuation methods. But I am a but skeptical about them.
It’s a wrap: does DAI crypto make a good investment?
While you should not invest in DAI expecting its price to appreciate you can earn a decent return if you park you money in DAI in a MakerDAO savings account.
Alternatively consider investing in MKR itself.
I hope this answered your question. Feel free to comment below and I will gladly help further.
Please keep in mind that I am not a financial advisor and pretty clueless when it comes to managing my own finances so take all of the above with a pinch of salt. However, you can be pretty certain that DAI will not appreciate in value if you invest in it.
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