Earn More Dai Every Day – Munair
Dai is a cryptocurrency. It gained fame because of its stable value and decentralized nature. It is redeemable for one US dollar and, thanks to smart contracts and folks trading on margin, it also pays interest.
The easiest way to earn interest on Dai is acquire and hold cDAI. cDAI is a token. It represents the right the principal and any interest accrued on a quantity of loaned Dai.
The simplest way to get hands on some cDAI is to use Uniswap. Uniswap is a decentralized exchange. It is a cryptocurrency only exchange. So, Uniswap does not accept US dollars.
US Dollars (or Philippine Pesos) must first be exchanged for cryptocurrency. A gateway exchange is required to make that happen. A gateway exchange is used to convert US dollars (USD) into digital assets like Bitcoin (BTC), Ether (ETH), or Dai (DAI).
Some day gateway exchanges will list cDAI as well. There will be no need to use Uniswap when they do. cDAI will be obtainable directly through the gateway exchange.
Until then, it is better to exchange US dollars for ETH (on a gateway exchange) and then ETH for cDAI (on Uniswap). Liquidity is the major reason for doing it the reason for doing things this way. The cDAI / ETH market on Uniswap is its sixth largest market. Using this transition will minimize fees.
The other way to acquire cDai requires already owning cryptocurrency and opening a collateralized debt position (or CDP). This is the way to borrow Dai. Then cDAI can be obtained directly from a Compound Finance money market. Unfortunately, a complete novice needs more time to feel comfortable risking a highly volatile cryptocurrency (like ETH) to obtain Dai.
It is advisable to stay away from borrowing DAI at this incipient stage. Instead, go to Coinbase and use this link to open a new account. That link entitles you to $10 after your first purchase of $100 worth of ETH.
For total beginners, the easiest way to obtain cDAI via Uniswap is to download Coinbase Wallet (for iOS or Android) and link it to the newly established Coinbase account.
Someday, the desire to use the value accumulated in cDAI will arise. cDAI will have to be converted into US dollars (or Philippine pesos) when that time comes.
The redemption process is the opposite of the acquisition process. The first step is to use Coinbase Wallet to convert cDAI to ETH via Uniswap. The ETH must then be transferred to the gateway exchange where ETH can be exchanged for USD. The last step required is withdrawing dollars (or pesos) to the bank account used to establish the Coinbase account.
The best way to hold cDAI is to put it in tamperproof cold storage. The D’CENT Biometric Wallet [1] conveniently holds cDAI since it supports all ERC-20 tokens. These wallets can be obtained on Amazon for $159.
That said, do not plan on acquiring huge sums of cDAI until the market for it matures. cDAI is not the most liquid asset. According to CoinGecko, about $4K dollars worth of cDAI trades each day.
Additionally, please know that holding interest-earning cDAI tokens securely in tamperproof cold storage (the D’CENT Biometric Hardware Wallet) does not eliminate every risk associated with lending DAI. Holding a cDAI token in a hardware wallet is more risky than holding a US dollar in an FDIC insured bank account.
That is because cDAI tokens are smart contracts. Smart contracts are code. Code tends to be buggy. Therefore, those precious funds are at risk. That said, cDAI presents an opportunity to earn interest on smaller amounts of idle cash. Acquire a small amount and start to experiment with the nascent, permissionless, decentralized revolution in finance.
Published at Sun, 01 Sep 2019 18:43:51 +0000
Bitcoin Pic Of The Moment
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By trendingtopics on 2019-04-03 11:08:58
