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Dai Price Prediction 2024: How Can AaveDAO Debate On Collateral Impact DAI Price?

Published April 8, 2024 8:48 AM
Giuseppe Ciccomascolo
Published April 8, 2024 8:48 AM

Key Takeaways

  • AaveDAO is debating over the limitations of using Dai as collateral.
  • Dai’s DAI is a stablecoin pegged to the US dollar.
  • One price prediction says it may reach $1.599875 next year.

The Aave decentralized autonomous organization (AaveDAO) engaged in fervent deliberations regarding the limitations  of Dai (DAI) collateral, with risk management consultants Chaos Labs introducing a novel proposal aimed at reducing Dai loan-to-value ratios (LTV) by 12%. This initiative comes from earlier advocacy by Aave Chan initiative founder Marc Zeller, who advocated for a substantial 75% reduction.

Aave is a crypto lending platform operating across multiple blockchain networks, facilitating borrowers to secure loans in one cryptocurrency while leveraging another as collateral. The governance of this platform lies in the hands of Aave token holders, collectively constituting AaveDAO. Meanwhile, Dai, an algorithmic stablecoin, derives its backing from diverse forms of crypto collateral such as USDC, Ethereum, among others, and is issued through the Maker protocol governed by MakerDAO.

However, MakerDAO encountered scrutiny on the AaveDAO forums on April 2, following its decision to mint 600 million DAI and deposit it in a vault with the decentralized lending protocol Morpho. This move prompted concerns, especially considering an April 1 proposal on the MakerDAO forums aiming to augment the vault’s minting limit to 1 billion DAI, which could potentially exacerbate the stablecoin’s supply dynamics.

Dai did not immediately respond to a request for comment.

But what is Dai (DAI)? How does Dai work? Let’s see what we can find out, and also take a look at some of the Dai Price Predictions that were being made as of April 8, 2024.

Dai Coin Price Prediction

Let’s examine some of the Dai price predictions being made on April 8, 2024. It is crucial to bear in mind that price forecasts, particularly for a potentially volatile asset like cryptocurrency, often turn out to be inaccurate. Additionally, please remember that many long-term crypto price predictions are generated using algorithms, which means they can change at any time.

2024 2025 2030
Prediction #1 $1.01 $1.01 $1.01
Prediction #2 $1.749863 $1.599875 $1.829857
Prediction #3 $0.99 $1 $1.012181

First, CoinCodex  had a short-term Dai price prediction that saw the coin climb to $1.026274 by April 13 before retracing to around $1.014489 by May 7. The site’s technical analysis was highly bullish, with 25 indicators sending positive signals and four making a bearish one.

Dai Price Prediction for 2024

DigitalCoinPrice  said Dai would reach $1.01 this year while SwapSpace  expects it at $1.749863 and StormGrain  said DAI would close the year at $0.99. 

Dai Price Prediction for 2025

StormGrain said Dai would reach $1 and SwapSpace sees it at $1.599875. DigitalCoinPrice said DAI would trade at $1.01. 

Dai Price Prediction for 2030

Moving on to a more long-term Dai price prediction, SwapSpace said the coin would be worth $1.829857 in 2030 and StormGrain expects it at $1.012181. DigitalCoinPrice made a DAI price prediction of $1.01 at the start of the next decade.

Google Gemini AI Price Prediction for Dai (as of April 8)

Google’s Gemini AI platform gave the following price prediction for Dai on April 8. Please remember that the exact price prediction of an asset or cryptocurrency in the future is nearly impossible to achieve. Additionally, artificial intelligence price predictions are predicated on past performances and are in no way entirely accurate.

Short Term (Next 3 months)

  • Expected price: Not Available
  • Factors to Consider:
    • Stablecoin Nature: Unlike other cryptocurrencies, Dai is a stablecoin designed to maintain a peg of $1 USD. This means its price fluctuations should be relatively small compared to other cryptocurrencies.
    • Market Conditions: The overall health of the cryptocurrency market can impact the price of Dai. If the market experiences a bull run, Dai might see some price appreciation. Conversely, a bear market could lead to a slight decrease.

Medium Term (Next 6 months)

  • Expected price: $1.26
  • Factors to Consider:
    • Market Conditions: The overall cryptocurrency market significantly impacts stablecoins like Dai.
    • Demand for Stablecoins: Increased demand for stablecoins could push the price up slightly.
    • Regulations: Regulatory changes could affect the use of Dai.

Long Term (Next 5 years)

  • Expected price: $1.34
  • Factors to Consider:
    • Stablecoin Nature: Dai is a stablecoin designed to maintain a 1:1 peg with the US dollar. This means its price should ideally stay around $1.
    • Market Factors: The actual price of Dai could deviate from $1 due to various factors like:
      • Demand for stablecoins in DeFi applications.
      • Fluctuations in the value of collateral backing Dai.
      • Regulatory changes impacting stablecoins.

Dai Price History

Let’s now take a look at some of the highlights and lowlights of the Dai price history . While past performance should never be taken as an indicator of future results, knowing what the coin has done can help give us some very useful context when it comes to either making or interpreting a Jito price prediction. 

Dai price history
Dai price in 2023 and 2024. | Credit: CoinMarketCap

When Dai first came onto the open market in November 2019, it was worth $0.9922. It then jumped to $1.0940 in March 2020, reaching its all-time high, before dropping to its record low of $0.9713 in the same month. For the following two years, the stablecoin moved around $0.90, hitting $0.9999 on April 8, 2024.

At that time, there were 5.35 billion DAI in circulation, representing the total supply. This gave Dai a market cap of about $5.35 billion, making it the 24th largest crypto by that measurement.

Is Dai a Good Investment?

It is hard to say. The coin has been around for a long time but, on the horizon, there’s no clear bullish or bearish sign.

As ever with crypto, you will need to make sure you do your own research before deciding whether or not to invest in Dai.

Will Dai go up or down?

No one can really tell right now. While the Dai crypto price predictions are largely positive, price predictions have a well-earned reputation for being wrong. Keep in mind, too, that prices can, and do, go down as well as up. 

Should I invest in Dai?

Before you decide whether or not to invest in Dai, you will have to do your own research, not only on DAI, but on other, related, coins and tokens such as Ethereum (ETH) and Solana (SOL). Either way, you will also need to make sure that you never invest more money than you can afford to lose.

Dai (DAI) Explained

The first decentralized, collateral-backed cryptocurrency, DAI is a crypto asset that attempts to maintain a price of 1 U.S. dollar per 1 DAI by locking other crypto assets in contracts.

This means that unlike other asset-backed cryptocurrencies, which for-profit companies may issue, DAI is the product of an open-source software called the Maker Protocol, a decentralized application running on top of the Ethereum blockchain.

As such, DAI maintains its value not by being backed by US dollars custodied by a company but by using collateralized debt denominated in ether (ETH), Ethereum’s cryptocurrency.

How DAI Works

DAI is a crypto asset that is collateralized by other cryptocurrencies. If users want to acquire DAI, they can spend ETH to purchase the dollar equivalent amount in DAI on an exchange or they can collateralize ETH and other assets using the Maker Protocol.

The latter method allows users who do not want to sell their ETH to acquire DAI still.

Dai Attention Tracker

Dai Google search volume
Dai Google search volume. | Credit: Google

Here is a chart for the Dai Google search volume for the past 90 days. This represents how many times the term “Dai DAI” has been Googled over the previous 90 days.

FAQs 

How many Dai are there?

As of April 8, 2024, there were 5.35 billion DAI in circulation, representing the total supply.

Will DAI reach $2?

It seems impossible as the coin is pegged to US dollar and no main price predictions expects it to reach that level soon.

What is Dai?

The first decentralized, collateral-backed cryptocurrency, DAI is a crypto asset that attempts to maintain a price of 1 U.S. dollar per 1 DAI by locking other crypto assets in contracts.

This means that unlike other asset-backed cryptocurrencies, which for-profit companies may issue, DAI is the product of an open-source software called the Maker Protocol, a decentralized application running on top of the Ethereum blockchain.

Disclaimer 

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

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