Pundi X has added the Dai stablecoin to a list of crypto-currencies supported by its famed point of sale (POS) device, the Pundi XPOS. The XPOS already supports popular tokens like Bitcoin, Ethereum, XEM etc.
Dee Duncan of BTC King of USA, a distributor of the XPOS powered by @Pundi Labs explained why this new addition is important and necessary.
“Dai stablecoin is a legitimate solution to emerging markets such as the African continent and Latin America. Dai provides stability to local economies to trade both nationally and internationally.”
Dai is a USD-pegged stablecoin built on the Ethereum Blockchain, and has no centralized authority. Unlike other fiat backed stablecoins which fluctuate, Dai’s one USD equivalent is maintained through automatic pricing mechanisms built into smart contracts. When Dai is worth more than $1, the smart contract pricing mechanisms works to decrease the price. Conversely, when Dai is worth below $1, the smart contract pricing mechanisms works to increase the price.
Dai can be traded freely like any other ERC20 token, and anyone with an Ethereum wallet can own, accept, and transfer it without a middleman.
According to its creators, a stable digital asset like Dai is essential to realizing the full potential of Blockchain technology. The whitepaper also adds that unlike other stablecoins, Dai is ‘completely decentralized’.
Users can obtain Dai by buying it from brokers or exchanges, and Dai holders can utilize a special mechanism known as the Dai Savings Rate to earn a steady, low-risk return on their holdings.
This Makerdo token utilizes Maker, a smart contract platform on Ethereum that backs and stabilizes the value of Dai through a dynamic system of Collateralized Debt Positions (CDPs), autonomous feedback mechanisms, and appropriately incentivized external actors.
A smart contract is a contractual agreement that is implemented using software. Unlike a traditional contract where parties may seek remedial action through the legal system, a smart contract is self-enforced (possibly also self executed), depending on whether specific conditions, that are monitored through software, are met.
Maker enables anyone to leverage their Ethereum assets to generate Dai on the Maker Platform. Once generated, Dai can be used in the same manner as any other crypto-currency: it can be sent freely to others, used as payments for goods and services, or held as long term savings. Importantly, the generation of Dai also creates the components needed for a robust decentralized lending platform.
The addition of Dai to the XPOS further increases the number of stablecoins supported by the point of sale device. XPOS already supports stablecoins like Pax and the NXPS token. Meanwhile coinmarketcap.com ranks Dai 75th top crypto overall with a market capitalization of $78 million, a figure almost exactly the same as the number of coins in circulation.
Many observers believe stablecoins such as Dai can potentially hasten crypto-currency adoption as they are not subject to price fluctuations common with pioneering cryptos like Bitcoin or Ethereum. Merchants and retail outlets will likely accept a decentralized currency if it is able to act as a stable store of value just as well as it acts as a medium of exchange.
Prior to the emergence of stablecoins, crypto-currencies were generally viewed as more volatile than other currencies or commodities in general use, and as such they were not widely accepted as a means of exchange outside crypto and digital communities. For instance, a UK parliamentary report supporting this view, states that the number of merchants accepting cryptos as a payment method is fewer than 600 in the entire UK.
However, the coming out of devices like the XPOS along with the creation of stablecoins like Dai, will likely to see more merchants accepting crypto-currency as a method of payment. This is especially vital for businesses operating in countries plagued by hyper-inflation, crypto-currencies should offer an alternative to fiat currencies.