What is the total supply of $dai and how is it regulated?

3 answers

• tianNov 06, 2021 · 5 years ago
  The total supply of $dai is determined by the MakerDAO protocol, which is an algorithmic decentralized autonomous organization (DAO). The supply is regulated through a system of smart contracts and on-chain governance. The protocol uses a mechanism called the Dai Savings Rate (DSR) to incentivize users to hold and save $dai, which helps stabilize its value. Additionally, the MakerDAO community can vote on changes to the protocol, including adjustments to the supply if necessary. This decentralized governance ensures that the supply of $dai remains stable and responsive to market conditions.
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• TizzleOzOct 07, 2020 · 6 years ago
  The total supply of $dai is regulated through a combination of smart contracts and decentralized governance. The MakerDAO protocol, which governs $dai, uses a system of collateralized debt positions (CDPs) to create and destroy $dai based on demand. When users deposit collateral, such as Ethereum, into a CDP, they can generate $dai. Conversely, when $dai is repaid to the system, the corresponding amount of collateral is released. This mechanism helps maintain the stability of $dai's value and prevents excessive inflation or deflation. The MakerDAO community plays a crucial role in governing the protocol and making decisions regarding the supply of $dai.
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• Madden LauesenDec 11, 2022 · 3 years ago
  The total supply of $dai is regulated by the MakerDAO protocol, which is a decentralized autonomous organization (DAO). The protocol uses a combination of collateralized debt positions (CDPs) and on-chain governance to manage the supply of $dai. When users create $dai by locking up collateral, the supply increases. Conversely, when $dai is burned by repaying debt, the supply decreases. This mechanism helps maintain the stability of $dai and ensures that its value remains pegged to the US dollar. The MakerDAO community, consisting of MKR token holders, has the power to make decisions regarding the protocol and its supply.
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