Thousands of crypto-enthusiasts make Ethereum to DAI conversion daily. It is a popular exchange destination because both cryptocurrencies have high liquidity and demand among users. However, many face the problem of high commissions and lengthy transactions. We have studied many ETH to DAI exchange platforms and created a step-by-step guide for you. It will help you avoid difficulties and take advantage of the most favorable conditions for converting two liquid cryptocurrencies.
What is Ethereum?
Ethereum is the second most well-known blockchain-based cryptocurrency in the world. The coin was created as a more advanced and functional analysis of Bitcoin, the most popular cryptocurrency without any analogs.
Indeed, with the growing popularity of the world’s first cryptocurrency, Bitcoin, transactions in the blockchain have become very slow. As a result, it became inconvenient and inefficient to deploy smart contracts in the Bitcoin network. It was the main reason for the emergence of a new platform to create Ethereum smart contracts with its cryptocurrency.
The story of Ethereum began in 2013 with the idea that came to Vitalik Buterin. He is a developer who initiated a crowd-sale (fundraising to implement the startup) for his project. In July 2014, 25,000 Bitcoins with a market capitalization of $17 million were raised. The funds were used to launch the global open-source Ethereum platform in 2015.
This network operates using smart contracts, making it fully decentralized and anonymous.
Smart contracts are computer algorithms in which the subject and terms of the “transaction” are fully spelled out. In addition, smart contracts describe the order of execution of these conditions in a fully automatic mode without the participation of a third party (bank, notary, state, witness, etc.).
The Ethereum platform’s smart contract system makes the need for a third party unnecessary. So, for example, you don’t need to go to a bank to make a transfer. Instead, it is enough to select the address of a contractual Ethereum wallet and make the transfer.
What is DAI?
DAI is an ERC-20 token with a fixed exchange rate for the U.S. dollar. The token is issued by the decentralized MakerDAO platform on the Ethereum blockchain. In other words, the DAI token is a stablecoin, that is, the digital counterpart of the dollar.
Cryptocurrencies such as DAI are regulated by the algorithmic protocol on which they operate. Tokens are not issued arbitrarily by miners: they are only issued when a user makes a deposit.
DAI holders can generate income by storing the asset in a wallet, lending stablecoins to other users, or adding them to liquidity pools. As a result, the DAI token has great liquidity among crypto enthusiasts and investors.
Indeed, DAI differs from other stablecoins in its complete decentralization. For example, to get USDT tokens, you need to deposit the equivalent amount in USD currency. You have to trust a centralized issuer to hold currency reserves. DAI issuance and exchange are managed by a smart contract, providing autonomy and sovereignty from intermediaries. And instead of fiat currencies, the holder uses digital assets to provide collateral.
But that’s not the only feature of DAI. Multiple cryptocurrencies can collateralize stablecoin. You can use different digital assets for collateral: Ethereum (ETH), Basic Attention Token (BAT), Wrapped Bitcoin (WBTC), and even other stablecoins like USD Coin (USDC).
Ethereum vs. DAI
Many users are interested in exchanging Ethereum with DAI because ETH is a sought-after cryptocurrency, and DAI is a popular stablecoin. Therefore, you can profitably exchange these cryptocurrencies with minimal network fees in a short time.
| Ethereum | DAI | |
| Release | 2015 | 2017 |
| Total circulation | 121 021 566 | None (stablecoin) |
| Protocol | PoS | LPoS |
| Maximum emission | None | None |
| Algorithm | Ethash | Ethash |
Below is a step-by-step guide on buying DAI for ETH through Droidex – a smart DEX aggregator that offers its users the best rates – and vice versa.
So how to buy DAI with Ethereum?
- First of all, visit Droidex’s official website and click “Start Swap”.
- Then, choose Ethereum blockchain, if you want to swap ETH to DAI.
- Select tokens – ETH and DAI.
- Next, enter the number of tokens – let it be 100. After that, tap “Connect Wallet”.
- Connect the wallet – for example, MetaMask.
- Once you’ve connected the wallet, press the button “Swap”.
- Finally, click “Confirm Swap”.
- That’s it! Get your tokens!
Conclusion
You can use these step-by-step instructions to exchange ETH for DAI anytime. We hope it will help you avoid overpayment of commissions and other inconveniences of some conversion platforms.