DAI price prediction: Is DAI coin a good investment?
As a stablecoin that aims to help people access loans, what is the DAI price prediction?
Dai is a cryptocurrency that has had a lot of people talking recently. Where is it going?
Here, we will tell you a little about the DAI coin itself, as well as looking at its price history, before we discuss what people are giving as a DAI price prediction.
All about DAI
DAI is one of two native tokens of the MakerDAO network. The other is called MKR, and acts in much the same way as a lot of other cryptos, in that it is a governance token.
MKR holders can vote on proposed changes to the network. The more MKR you hold, the more voting power you have. MKR also works as an investment in MakerDAO itself. If you hold MKR you can, in effect, loan it out. The interest people generate from loans of MKR is used to buy MKR and then burn the tokens. Token-burning creates scarcity which should, in theory, keep the price of MKR sustainable.
DAI is a little different because it is not a conventional cryptocurrency that can, theoretically, be incredibly volatile. DAI is a stablecoin. This means it is linked to the value of a fiat currency. In the case of DAI, it is pegged to the US dollar.
So ideally, the price of the DAI cryptocurrency should stay pretty flat, close to or – even better – at $1. This does not always happen, as we will see later, but there isn’t much volatility in the value of DAI, at least when compared with other non-stable cryptos. This is worth keeping in mind when it comes to making a DAI price prediction.
MakerDAO was founded in 2014 by Danish entrepreneur Rune Christensen. It is what is known as a digital autonomous organisation, or DAO, which is a program, almost always based on the Ethereum blockchain, that has a built-in ability to help people manage their code. It is used in decentralised finance (DeFi), the concept that is ultimately behind cryptocurrency’s success.
DeFi enables people to make financial transactions that bypass banks. This, in theory, benefits those who do not have a bank account – such people currently number around 1.7 billion, according to the World Bank – and helps people transfer money internationally without having to pay commission fees and remittance service charges.
MakerDAO was set up to enable people to take out loans using cryptocurrency as collateral. The loans themselves are made in DAI, because MakerDAO backs the DAI coin itself. This makes DAI different from a lot of stablecoins, which are backed by a private company. While MakerDAO is not publicly owned, it is decentralised – there is no single person in control and decisions are made by the people who hold the MKR token.
If you want to know how DAI is able to stay close to the value of the dollar, it is because MakerDAO has set up a series of smart contracts. These are computer programs with an agreement that is automatically executed once the terms are met. In this case, the smart contract executes to make sure the value of the DAI crypto neither gets too high nor too low.
It is also worth bearing in mind the fact that DAI, which is used in loans, does generate a rate of interest, so people who hold the coin can generate a profit from that, too.
DAI/USD price history
|Aug 15, 2022||0.9970||0.0000||0.00%||0.9970||0.9971||0.9969|
|Aug 14, 2022||0.9970||0.0000||0.00%||0.9970||0.9971||0.9970|
|Aug 12, 2022||0.9973||-0.0001||-0.01%||0.9974||0.9976||0.9970|
|Aug 11, 2022||0.9973||-0.0002||-0.02%||0.9975||0.9977||0.9962|
|Aug 10, 2022||0.9974||0.0002||0.02%||0.9972||0.9984||0.9970|
|Aug 9, 2022||0.9973||0.0002||0.02%||0.9971||0.9975||0.9969|
|Aug 8, 2022||0.9972||0.0001||0.01%||0.9971||0.9977||0.9969|
|Aug 7, 2022||0.9975||-0.0001||-0.01%||0.9976||0.9977||0.9971|
|Aug 5, 2022||0.9978||-0.0004||-0.04%||0.9982||0.9985||0.9971|
|Aug 4, 2022||0.9981||0.0011||0.11%||0.9970||0.9988||0.9969|
|Aug 3, 2022||0.9970||0.0000||0.00%||0.9970||0.9973||0.9968|
|Aug 2, 2022||0.9970||-0.0001||-0.01%||0.9971||0.9972||0.9958|
|Aug 1, 2022||0.9970||-0.0001||-0.01%||0.9971||0.9971||0.9968|
|Jul 31, 2022||0.9971||0.0001||0.01%||0.9970||0.9971||0.9970|
|Jul 29, 2022||0.9972||0.0000||0.00%||0.9972||0.9972||0.9962|
|Jul 28, 2022||0.9971||0.0000||0.00%||0.9971||0.9978||0.9970|
|Jul 27, 2022||0.9972||-0.0007||-0.07%||0.9979||0.9981||0.9962|
|Jul 26, 2022||0.9978||-0.0001||-0.01%||0.9979||0.9984||0.9977|
|Jul 25, 2022||0.9981||0.0005||0.05%||0.9976||0.9981||0.9975|
|Jul 24, 2022||0.9977||-0.0001||-0.01%||0.9978||0.9979||0.9976|
From the Maker Protocol whitepaper
According to the whitepaper, DAI is “resistant to hyperinflation due to its low volatility”, and offers “economic freedom and opportunity to anyone, anywhere” – an appealing prospect for many users and investors.
The document goes on to say: “The Maker Protocol is one of the largest dApps on the Ethereum blockchain. Designed by a disparate group of contributors, including developers within the Maker Foundation, its outside partners, and other persons and entities, it is the first decentralised finance (DeFi) application to see significant adoption.”
Before we discuss some DAI crypto price predictions, let’s have a little look at its history. Although prior results are neither an indicator nor a guarantee of future performance, it can still be useful to gain some context about what the cryptocurrency has done in the past.
DAI price history
As we have already said, DAI is a stablecoin pegged to the US dollar (see the DAI coin price chart above). This means that, ideally, it should always be worth $1. Therefore the DAI price prediction for 2022 and beyond should also be $1.
If we take a look at the DAI price history, we can see that it has been broadly successful in this regard. For instance, the difference between its all-time high of $1.11 on 13 March 2020, and its all-time low of $0.96 on 19 February 2020, is just 15 cents. Compared with other, non-stable cryptocurrencies, that is a very tight price band.
That said, there have been some fluctuations in its price, although nothing like the volatility we normally see when looking at cryptocurrencies.
There was a more noticeable series of price changes early on in DAI’s life. The DAI that we know now, multi-collateral DAI, only came out in November 2019. Its predecessor, single-collateral DAI (SAI), could only have one cryptocurrency, Ether (ETH), used as collateral against its loans, but the new DAI can have a range of cryptos. When it launched on 22 November 2019, it was worth $0.9974.
On that day, it hit an intraday low of $0.9722 and an intraday high of $1.03 before closing at $0.9926. The first time it seemed to settle at the magic dollar mark was at close of trading on 24 November 2019 but, in truth, the first few months saw the DAI hovering around $1 without ever seeming to stay in one place for too long.
In fact, it was almost a year into the crypto’s existence before it stayed at $1 for any length of time, solidifying at that level with only a few minor fluctuations between 14 November 2020 and 18 April 2021, when it opened at $1.01, hit an intraday high of $1.03, an intraday low of $0.9983 and closed at $0.9992.
Indeed, despite the wild fluctuations of the crypto market in 2021, the DAI coin price stayed largely stable in November, trading at $1 on 24 November 2021. Throughout December, DAI suffered from more rapid fluctuations around the $1 mark, hitting highs of $1.0098 on 6 December and lows of $0.9956 on 28 December.
The New Year ushered in more stability, trading at around $0.999. In March and April 2022, the coin was largely trading at $1 and by 9 May it was valued at around $0.999.
Despite a market-wide crash in mid-May which saw TerraUSD (UST) lose its dollar peg, DAI fared reasonably well: the token saw lows of $0.9942 amid the turmoil, but had re-stabilised within days.
It is currently the fourth-largest stablecoin by market cap, behind Tether (USDT), USD Coin (USDC) and Binance USD (BUSD).
As of 4 August the token is trading at $0.9996. But what of the future? What are people saying about the DAI price prediction?
The future of DAI
DigitalCoinPrice says there will be ongoing stability, with a DAI coin price prediction for 2022 onwards at $1.00 to $1.01.
WalletInvestor’s DAI coin price prediction is that it will be worth $1.001 in a year’s time.
It must be noted that any substantial price movement away from the dollar mark, be it an increase or a decrease, could destabilise the network token. In theory, any DAI price prediction for 2025 or DAI price prediction for 2030 should be similar to the figures above, as it is supposed to remain pegged to the dollar.
It could be. Remember, the main purpose of DAI coin is as a store of value. Ideally, its price should not go up.
That said, you need to do your own research. When searching for DAI crypto predictions, remember prices can go down as well as up, and that you should never invest more money than you can afford to lose.
If the analysts above are correct, then no. That said, it is important to remember that, because DAI is a stablecoin, its creators at MakerDAO will do everything they can to peg the price to the US dollar. This means that growth, as well as decline, can be a bad thing for the coin.
Remember: forecasts change frequently and are often wrong.
If you want to buy DAI, you can do so at a range of exchanges. Always remember to do your own research, though, and never invest more money than you can afford to lose.