What is cDAI?
cDAI is a cryptocurrency token that is pegged to the US Dollar and backed by Ethereum-based collateral.
It is an ERC-20 token built on the Ethereum blockchain and designed to provide a stable store of value for users. cDAI is an abbreviation for “Compound Dai”, which is a stablecoin created by Compound Labs, a decentralized finance (DeFi) protocol. The cDAI token was created to provide users with a stable store of value that can be used in DeFi applications.
It allows users to deposit their Ether (ETH) into Compound’s lending platform and receive cDAI tokens in return. The cDAI tokens are then used as collateral for loans, allowing users to borrow other cryptocurrencies such as USDC or DAI at lower interest rates than traditional lenders. The value of cDAI is pegged to the US Dollar, meaning it will always remain worth $1 USD regardless of market fluctuations.
This makes it an ideal asset for those looking to hedge against volatility or store their wealth in a safe and secure manner. Additionally, since it is built on the Ethereum blockchain, it can be used in various DeFi applications such as decentralized exchanges (DEXs), lending protocols, and more.
