How to buy, sell and trade Dai (DAI)

A step-by-step guide to buying Dai

If you want to get your hands on this stablecoin, you can buy it directly with AUD on select exchanges like CoinJar, or acquire a digital currency listed in a trading pair with Dai, such as Bitcoin or Ether, and then exchange it for Dai.

Dai can be traded on a variety of crypto exchanges, so compare the features and fees of those exchanges so you can choose a platform that’s right for you. Here’s an example of how to use Ethereum to buy Dai on the Bibox crypto exchange.

• Step 1. Buy ETH

  The first thing you’ll need to do is acquire some Ether (ETH), which is the native currency of the Ethereum platform. For details on how to do this, check out our how to buy ETH guide.

• Step 2. Register for an account with Bibox

  Bibox is a Chinese cryptocurrency exchange where you can buy and sell dozens of cryptocurrencies. To register for a Bibox account, head to the Bibox website and click the “Sign up” link at the top right of screen.

  You can then provide your email address and choose a password to create an account. We also recommend setting up 2-factor authentication and a funds withdrawal password on your account before proceeding to step 3.

• Step 3. Deposit ETH into your Bibox account

  If the ETH you’ll use to buy DAI is already in your Bibox account, skip ahead to step 4.

  If not, you’ll need to transfer your ETH tokens to your Bibox wallet. To do this, log in to your Bibox account and select “Master account” from the “Funds” tab. Find “Ethereum” in the list of supported currencies and click the relevant “Deposit” link.

  You’ll then be shown your Bibox Ethereum wallet address. Copy this address and then paste it in the “To” field when depositing funds from your external wallet or from another exchange.

• Step 4. Buy Dai

  Once your ETH deposit has arrived, navigate to the exchange page and buy Dai.

  On Bibox, this means you’ll need to look for the “Token Trading” tab at the top left of screen and choose either the “Basic” or “Full Screen” view.

  Next, hover your mouse over the trading pair drop-down menu near the top left of the trading screen. Use the search box provided to search for and select “ETH/DAI”.

  Now it’s time to sell your ETH for DAI. On the “Sell” side of the screen, select a limit order and then specify the price you’re willing to pay and how much ETH you want to spend. Make sure you take a moment to review the transaction details before you click “Sell”.

How to sell Dai

If you want to sell your Dai tokens, the process you’ll need to follow is quite similar to that outlined in step 4. However, please be aware that Dai is only listed in trading pairs alongside a limited range of currencies, so you may not be able to make a direct exchange for the coin or token you want.

Which wallets can I use to hold Dai?

While you can store your Dai tokens on an exchange if you prefer, the risk of hacking and theft means it’s generally considered a safer option to transfer your tokens to a secure wallet.

Dai is an ERC20 token on the Ethereum network, so there are plenty of wallets to choose from. Some of the popular ERC20-compatible wallets you may like to consider include:

• MyEtherWallet (web wallet)
• Ledger Nano S (hardware wallet)
• TREZOR (hardware wallet)
• Eidoo (desktop and mobile wallet)
• MetaMask (browser extension)

Learn more about storing your cryptocurrency in our ultimate wallets guide.

How MakerDAO and how Dai work

One of the key barriers to the widespread adoption of cryptocurrencies is their volatility. Bitcoin, Ether and other major digital currencies have all been known to experience substantial price fluctuations, sometimes rising or falling as much as 25% in the space of a single day. If cryptocurrencies are to offer a viable alternative to fiat currency for everyday use, many believe we’ll need the introduction of a price-stable cryptocurrency – widely known as a stablecoin.

Find out more about stablecoins and how they work.

MakerDAO is the company behind Maker, a smart contracts platform designed to back and stabilise the value of the Dai stablecoin. The Maker platform has two currencies:

• Makercoin (MKR). This utility token has a fluctuating price and is used to govern the Maker platform.
• Dai (DAI). Dai is a stablecoin that protects against market instability and can be used for payments, savings and more.

Dai is a collateral-backed cryptocurrency designed to have a stable value relative to the US dollar. Anyone who has Ethereum assets can leverage them to generate Dai on the Maker platform through smart contracts known as Collateralised Debt Positions, or CDPs.

As explained in the whitepaper:

CDPs hold collateral assets deposited by a user and permit this user to generate Dai, but generating also accrues debt. This debt effectively locks the deposited collateral assets inside the CDP until it is later covered by paying back an equivalent amount of Dai, at which point the owner can again withdraw their collateral. Active CDPs are always collateralised in excess, meaning that the value of the collateral is higher than the value of the debt.

Before you buy Dai: Things to consider

Cryptocurrencies are complicated and volatile assets, so you’ll need to thoroughly research any coin before deciding whether to make a purchase. There are many competing factors that can potentially drive a currency’s value up or down, so if you’re thinking of buying any Dai, consider the following factors first:

Consider all these factors and any other potential risks before deciding whether you should buy any DAI.

Disclosure: At the time of writing the author holds ADA, ICX, IOTA, POWR and XLM.