Dai is a stable coin that is pegged to the U.S dollar. What makes it unique is that it uses smart contracts to maintain this value. So far Dai has proved to be incredibly resilient and stable! Did you know that you can invest your Dai and earn interest? As of writing this post you could be making 7% per annum, which is much, much, much higher than what the banks are offering.
So read on to find out how you can start generating passive income, just by holding Dai.
Buying Dai is probably the hardest part of getting started investing. Probably the easiest way in Australia is through Binance. With Binance you can use the Banxa fiat gateway which lets you buy crypto using your Australian bank account or credit card. You’ll first need to buy BTC which can easily be converted into Dai on Binance. Here’s how:
- Get a Binance account
- Buy Bitcoin – if you’re Australian, make sure you select AUD when you buy BTC. You’ll save a lot on fees. And can also buy ETH using fiat. Either currency works.
- Exchange Bitcoin to Dai.
Earning interest on Dai
The easiest way to earn interest on Dai is using Dharma. I like this platform because it has been built for people who know nothing about crypto. Crypto and defi can be really confusing. But Dharma has made a super easy to use interface. Anyone – even your grandma could use Dharma.
Here is how to earn passive income through Dharma:
- Sign up to Dharma – you can signup through your web browser (mobile or desktop) or the newly released iOS app.
- Transfer your Dai into Dharma – Dharma actually never controls your funds. You are simply moving them into a secure smart wallet.
- That’s it! There are literally no other steps. And that’s why I love using Dharma. It makes the entire process of DeFi super simple.
Your Dai is now being lent through the Compound network. This is a global network of borrowers and lenders that is powered by smart contracts. This is how interest is generated.
Why I like Dharma
- It’s Secure – Dharma doesn’t store your keys. They are stored on your own device. In fact Dharma never has access to your funds. They use smart contracts to lend them on the compound platform.
- It uses Compound – Compound is a lending and borrowing network built on Ethereum. Loans taking out on Compound are at least 100% collateralised. This means you can’t lost your money lending on compound.
- It’s set and Forget – there are no settings or options to configure. You simply transfer your Dai into your Dharma smart wallet and it will start earning interest instantly. In fact, you can see it earning interest in realtime. This is the magic of DeFi!
- Withdrawals are instant – You can withdraw your crypto back to any exchange or wallet pretty much instantly. Your funds are never locked or trapped in a term deposit.
- It’s Global – This isn’t a product that is limited to U.S users. You can earn interest no matter where you live.
Dharma is a great way to save money. Think of it as the savings account of the future. If you’re sick of the crappy interest rates that banks are offering, then you should seriously look into Dharma and other DeFi products.