ARCIPEDIA · STABLECOIN

Plain English

DAI is a decentralized stablecoin minted by locking crypto collateral in MakerDAO smart contracts. Soft-pegged to the US dollar through over-collateralization rather than fiat reserves. Governed by holders of the MKR token.

How it actually works

To mint DAI, you deposit ETH or another approved collateral into a Maker “vault” at a ratio above 1:1 (typically 150% or more). You receive DAI as a loan against that collateral. If your collateral value drops, the vault is liquidated to repay the DAI. The system uses oracle prices, liquidation auctions, and an emergency-shutdown mechanism.

What it means for you

DAI is the original DeFi-native stablecoin. It avoids issuer credit risk (no Circle, no Tether) at the cost of collateral risk (the system depends on the value of locked crypto). Useful for members who want stablecoin exposure without a centralized counterparty.

How ARCrypto teaches this

The curriculum covers how DAI is minted, the operational mechanics of a Maker vault, and the structural risks (oracle, liquidation cascade, governance) that members evaluate before holding it.

Apply for the course →

← Back to ARCipedia

Educational content only. Not investment, tax, or legal advice.