What is DAI?

DAI is an ERC-20 stablecoin token released by the Ethereum-based MakerDAO protocol that is used to facilitate collateral-backed loans without an intermediary. DAI is pegged to the U.S. dollar in a 1:1 ratio so that each DAI should be worth $1 USD. DAI is a decentralized crypto-backed stablecoin, and thus maintains its USD peg by using collateral in the form of cryptocurrencies like ether (ETH).