Dai, one of the world's largest stablecoins (currently ranked #21 place), is at the heart of blockchain-based financial applications. It is a crypto-collateralized stablecoin, and it was developed in 2017 by MakerDAO, a decentralized, autonomous organization on the Ethereum blockchain. Although Dai stablecoin also equals $1, Dai is backed by Ethereum-based smart contracts. That's why we've for you how to buy Dai.
It maintains its stability via external market factors such as collateralized debt positions (CDPs), autonomous response mechanisms, and external economic incentives. Dai is more decentralized because only users can create and destroy the token (DAI tokens appear only after the deposit has been paid and disappear after payment of the debt).
Dai can be used to save, lend and borrow without the need for a middleman. As a result, some of the most favorable interest rates are found with the Dai stablecoin.
This all sounds good, but how can you acquire such a stablecoin? This article will take you through the steps necessary to purchase Dai.
Where to Buy Dai
The easiest way to buy Dai is through an exchange using US Dollars, Euros, Pound Sterling, or other fiat currencies.
Let's take a look at some of the most trusted exchanges that support Dai purchases.
|Name||Exchange Fees||Deposit Methods||Supported Cryptos|
As a leading exchange in over 100 countries, Coinbase prides itself on making cryptocurrency purchases easy for non-technical users. With an intuitive dashboard along with detailed guides on how to get started, many new users can look to Coinbase as the best way to buy Dai.
The fees at Coinbase vary between countries; however, debit and credit card purchases have a 3.99% fee attached. Bank transfers are often the best route to buying Dai on Coinbase, with no fees on deposits and just a 1.49% fee on purchases.
Users wishing to minimize fees further can also use the “Pro” version of the exchange, where fees start at 0.50% and decrease with volume. However, this method adds a little more complexity to buying Dai and should only be used by experienced traders.
As a leading exchange based in the United States, Kraken offers dozens of markets for a number of the largest cryptocurrencies. For Dai, Kraken supports the DAI/USD, DAI/EUR, and DAI/USDT trading pairs, making it one of the few reputable exchanges that allow users to acquire Dai with the Euro.
Fees at Kraken start at 0.26% and decrease with volume traded. Please note that purchases on Kraken require some understanding of exchange trades and do not come with the same simplicity as that from Coinbase.
Bitfinex is another popular and centralized exchange similar to Kraken and also supports Dai purchases. Unlike the first two exchanges, Bitfinex does not offer the ability to trade directly from fiat to Dai. Instead, Bitfinex offers token trading pairs such as MKR/DAI, OMG/DAI, and ZRX/DAI.
These pairs tend to have low liquidity, causing significant slippage for large purchases. Unless explicitly required, it is recommended that users buy Dai through another means.
For the more technically minded, Uniswap is one of the best places to buy Dai using any of the top Ethereum tokens. It not only has deep liquidity but is also decentralized, ensuring that users maintain control of their private keys at all times.
With Uniswap, users can buy Dai using any token which has liquidity on the exchange. This includes tokens like ETH and MKR all the way through to others such as BAT and LINK.
Uniswap is an Ethereum-based exchange that uses smart contracts to store liquidity. Users are able to swap between currencies in a matter of seconds, all without a 3rd party custodian.
It is not possible to buy Dai with fiat currency (USD, EUR, GBP, etc.) on Uniswap.
How to buy Dai: A Step-by-step Guide
For most investors, buying Dai with a fiat currency like US Dollars, Euros, or Pound Sterling is the easiest way to acquire stablecoin. Therefore, the following example will use the Coinbase exchange to buy Dai with US Dollars. The same steps can be followed for any other fiat currency supported by Coinbase.
Login to Coinbase and navigate to the DAI asset page.
On the right-hand side, select “Buy” and add a payment method.
This will open a pop-up that will allow users to purchase Dai with various payment methods. Users can select different options by clicking on the “Pay With” Tab. Please note that all Dai orders must be larger than $1.99 on Coinbase.
After entering an amount, users will have the ability to preview their buy, which shows the amount of Dai being purchased along with Coinbase's service fee.
Once the “Buy now” button has been pressed, Dai will immediately be credited to your account. However, there is a maximum period of 3 days before the Dai can be sent to another wallet.
Buying Dai with USDC
For those based in the United States, an alternative method for buying Dai is available and one which has the advantage of having more liquidity (ideal for larger purchases).
Coinbase's stablecoin – USDC – is also pegged to the dollar and can be used to buy Dai on the platform. Acquiring USDC can be done in a similar way to Dai, with the advantage of having more liquidity than that of the Dai trading pair.
Note that USDC – while also stable – cannot be used to access the same financial applications that Dai can. Users looking to use Dai to earn passive income or save in the Dai Savings Rate must convert their USDC to Dai.
Below is a step-by-step guide on how to purchase USDC before swapping it for Dai:
Login to Coinbase and navigate to the USDC asset page.
Use the right-hand side of the page to Buy USDC using fiat currency.
Once you see the preview to buy, place an order. Note that Coinbase does not charge any fee for purchasing USDC.
Using the newly acquired USDC, select the “Convert” tab and choose USDC as the “From” asset and Dai as the “To” asset. Once converted, Dai will become available in the Coinbase account being used.
Best wallets to hold DAI
|Coinomi||Software wallet. Desktop client (Windows, macOS, Linux), or mobile application (iOS, Android).||BTC, ETH, ETC, BTG, DOGE, LTC, LCC, BCH, DASH, NBT, PPC, RDD, MONA, DGB, DGC, NEOS, XVG, VTC, BTA, ABN & 100+ more||Free Download |
|Atomic||Software wallet. Desktop client (Windows, macOS, Linux), or mobile application (iOS, Android).||BTC, LTC, ETH, TRX, DGB, QTUM, XLM, ZEC, XRP, BCH and 150+ more||Free Download |
|Ledger Nano X||Hardware wallet. Companion client available for desktop (Windows, macOS, Linux), or mobile application (iOS, Android).||BTC, ETH, XRP, BCH, ADA, LTC, BNB, EOS, XTZ, XLM & 1,350+ more||$119.00 |
|Ledger Nano S||Hardware wallet. Companion client available for desktop (Windows, macOS, Linux), or mobile application (iOS, Android).||BTC, XRP, ETH, BCH, EOS, XLM, LTC, TRX, ADA, MIOTA & 1,330+ more||$59.00 |
|Trust||Software wallet. Mobile application (iOS, Android).||BTC, LTC, ETH, ETC, ERC, ERC +223||Free Download |
|Exodus||Mobile wallet,Hardware wallet,Desktop wallet||BTC, BCH, BTG, LTC, ETH, DASH, ETC, VTC, FUN, DCR, EOS, ANT, GNO, OMG, BAT & 15+ more||Free Download |
1. Exodus Wallet
Another good wallet is the Exodus, another non-custodial, multi-currency wallet. It can support more than 125 cryptocurrency assets. It is available for both desktop and mobile. With the mobile feature, it can be supported on either IOS or Android.
Thankfully, it has 24/7 customer service support while also having a built-in crypto exchange. But you have to pay a spread of 2% – 5% fees when using it.
Another advantage is that it is easy to use. But, it is a hot storage wallet, so you will need the internet to manage your cryptos.
2. Coinomi Wallet
Coinomi is a non-custodial, multi-currency wallet. It can support more than 1,770 cryptocurrency assets. Having been around since 2014, it is one of the earliest wallets out there, which means it is battle-tested. It Is also available for both desktop and mobile (IOS and Android). Like Atomic wallet, it has 24/7 customer service support. However, it is a hot wallet, meaning you will need the internet to manage your funds.
It also boasts of having no additional fees. Users only pay the fees to miners for transactions. In addition, it has a built-in crypto exchange, but most importantly, it is easy to use.
It supports Native Segwit for both Litecoin, Bitcoin, and many other cryptocurrencies. It also supports Unstopptable domain names, which are human-readable crypto domain addresses. In addition to that, the wallet supports a WB3 connection, and it has a Dapp browser, allowing you to connect to dapps right from within your wallet. It also supports multiple languages such as Chinese, Spanish, French, German, Russian, and others.
3. Atomic Wallet
The Atomic wallet is a non-custodial, multi-currency wallet, allowing it to support hundreds of coins and tokens. It has been renowned for being so easy to use. It also has good security features such as fingerprint security. However, it is a hot storage wallet, meaning that you will need the internet to allow you to manage your cryptos. But, it is private, so no Know-Your-Customer (KYC) is required.
Being a multi-currency wallet, it allows you to store a wide variety of tokens, both ERC20, and non-ERC20 tokens, from other ecosystems such as Bitcoin, Litecoin, Ethereum, VeChain, Algorand, etc. However, it cannot store ERC-721 tokens (non-fungible tokens).
What is cool about this wallet is that it has its own swap exchange, allowing flexible atomic swaps between tokens. It is integrated with Changelly's price feeds, making it susceptible to any price slippages that may occur on Changelly.
Atomic wallet has both a mobile and desktop wallet option, and it is available for both IOS and Android phones. The desktop wallet feature is compatible with Windows, macOS, Ubuntu, Debian, and Fedora.
Another cool thing is that the Atomic wallet has its own native token, the AWC token, which allows you to stake and earn more AWC tokens. This allows users to receive other rewards/discounts. It has 24/7 customer service support, which is a big relief as you now have the assurance that you can receive almost instant help. You can either chat with a representative online or send an email.
One of the few downsides is that it does not have a multiple wallet feature.
4. Trust Wallet
The Trust wallet is a non-custodial, multi-currency wallet. It can support up to 15 major cryptocurrencies and 20,000 supported tokens. This includes non-fungible tokens (NFTs). Like the other wallets mentioned above, easy to use. And just like the rest, it is a hot storage wallet, so you will need the internet to manage your cryptos.
It has its own built-in decentralized swap exchange, but it is limited as to the number of tokens you can swap for another. It is at least private, so no Know-Your-Customer (KYC) is required. It also has good security features.
Like the Atomic wallet, the Trust wallet allows you to store multiple cryptocurrencies from multiple blockchain ecosystems such as Bitcoin, Litecoin, Tezos, Ethereum, Algorand, and VeChain.
It also has its own Dapp browser, so you can access Dapps through Trust wallet without ever leaving it. It also supports multiple wallets, allowing you to store your funds in multiple wallets within just one app! It also good wallet connect feature, allowing you to connect to many more Dapps than other wallets.
Its code is open-source, allowing anyone to check for faults and encourage constant improvement. However, it lacks live customer service support. You will need to use either telegram or discord to speak with someone if you are having issues.
5. Nano Ledger S and X
The Ledger Nano S and X are cold storage, non-custodial, multi-currency wallets. Tokens are safely stored and can be managed offline. Unlike a mobile or desktop wallet, the Ledger alternative is superior in terms of security. It is a highly technologically advanced device for the safety and security of coins, which can support over 1,100 coins. The price for a Ledger Nano S is $59, while the Ledger Nano X is $119, both in US dollars.
What is cool is that you can swap tokens on the Ledger Live software itself. You just need to download it. The Ledger is integrated with other Web3 wallets such as Metamask, which allows you to securely connect your Ledger with certain defi protocols.
Despite being able to support more than 1,000 coins, the Ledger Nano S only allows you to only store a few tokens. This depends on the memory space for each coin. For example, the necessary memory space to download the app to hold Ethereum and all ERC-20 and 721 tokens are big. But considering that many tokens are ERC-20, you be able to store as many ERC-20 tokens as you please. It is just that it can only support a few blockchain ecosystems. On the other hand, the Ledger Nano X allows you to store many more coins and tokens. It also has a built-in Bluetooth feature. However, the S is cheaper than the X.
Despite their great reputation, both devices have been known to be confusing and time-consuming to set it up. In addition, because it is a cold wallet, it is travel restrictive. You would be unable to access your funds from anywhere unless you take your Ledger everywhere you go, which makes it risky for you to lose it.
In addition, scam emails with the company's own logo are common, convincing users to download or upgrade software, which is only malware. Any true upgrade can be found on the Ledger Live software, which notifies users when they log in. Users are never to download anything from any email they receive. Users are encouraged to contact the company first before they proceed to verify if the email legitimately came from them.
Ledger Nano X:
How to send your DAI to another wallet
Sending from an Exchange
DAI addresses are Ethereum-based, meaning that an ERC-20, any address can accept any Ethereum token or ETH. The defining feature of an Ethereum address is that it starts with “0x”, however you should always check and double-check that the address you are sending to is the one specified by the receiver.
With the address confirmed, create a withdrawal from the exchange in question and copy and paste the receiving address into the address field. Double-check again that you are sending DAI and that the address matches what was specified by the receiver. Once you are satisfied, click “send.”
Dai transactions incur a network fee. Usually, these fees tend to be small, but on the Ethereum network, they can be very expensive, depending on how congested the network becomes at the time of withdrawal. On Ethereum, it is usually best to transfer large amounts of crypto in order to make the transaction fees payment worth it.
Coinbase also allows Dai to be sent to an email address, meaning that the receiving party will have to accept the transfer and set up their own Coinbase wallet to receive it.
How do you use the Dai Savings Rate?
One of the most compelling reasons for buying Dai is being able to earn the Dai Savings Rate (DSR), a deposit contract that has played a significant role in the success of the Dai stablecoin.
The DSR acts as a permissionless savings account where anyone can participate with as much or as little Dai as they choose. Interest is paid every 15 seconds with no fees, and withdrawals can be made at any time.
While the governance mechanism behind the Dai Savings Rate has drawn criticism for its centralization and potential to be hacked, the smart contracts responsible for the DSR are highly secure with a strong audit history. Deposits in the DSR earn interest without the user ever having to release custody of underlying Dai.
The DSR is one of the many mechanisms used by Maker to help Dai retain its peg to USD, meaning that the interest rate changes regularly over time. So far, this interest rate can be as low as 2.00% and as high as 8.75%, with the majority of its time being spent around 7.00%. All changes are automatically applied, meaning users do not have to manage their funds to take advantage of any interest rate changes.
How to buy Dai: Conclusion
In conclusion, it can be a bit overwhelming at the amount of choices users can pick on where to buy DAI and which wallet is the best one for them to download and transfer it to. This is quite natural, given how new the crypto market is. It's only been around for about a decade. And for an early investor, these are the consequential hurdles one has to go through in order to be one of the first to earn high-interest rates.
However, with careful researching, planning, and calculation, any user, no matter how experienced, can navigate their way to buy some DAI and start earning those interest rates.