How to open a Dai Savings Account
In today’s DeFi Primer chapter, we introduce MakerDAO’s Dai Savings Rate (“DSR”), a novel savings account that you can start earning high interest today. To understand the inner workings of the Dai Savings Account and where the high interest comes from, continue reading. To get started with opening the account, jump ahead to “Get Started”.
DSR Basics
In order for Dai to maintain the US dollar peg, Dai Savings Rate (“DSR”) is one of the levers MakerDAO uses to influence the supply and demand for Dai. For example, if Dai is below $1 USD, DSR could be raised such that there is more demand to purchase Dai in the open market to earn higher interest. The action of purchasing Dai would in theory raise the price of Dai back to parity.
Dai starts earning interest when it is deposited into the Dai Savings Account (“DSR smart contract”). There is no minimum lockup time, and no minimum or maximum deposit limits. Interest is paid out in real-time as opposed to monthly in traditional savings accounts.
Dai Savings Account is a savings product with a higher interest rate than most other savings accounts in the Canadian market. The savings product with the next highest interest rate by a Canadian bank is at 2.8%.
Drawbacks of Dai Savings Account
Because MakerDAO is not a Canadian bank, your deposit does not have CDIC protection. As well, holding a US dollar denominated stablecoin means you are subject to foreign currency exchange risk.
Get Started
To get started with a Dai Savings Account in under 30 minutes, you’ll first need to get a cryptocurrency wallet. Redeem this Argent Wallet Golden Token on your mobile device, download the app, and choose your username.
Next, set up a PayTrie account. Purchase Dai using your bank account. When prompted to enter your “Ethereum address”, enter your Argent address that you just created.
Lastly, open Argent again, click on the “Finances” tab, then “Grow Your Holdings”, and select “Dai Savings”. Enter the amount you would like to save, and your Dai is now earning interest from MakerDAO’s DSR.
Looking Ahead
With applications like MakerDAO’s DSR, decentralized exchanges, and other novel DeFi applications sprouting across the ecosystem, we anticipate stablecoin and DeFi application adoption to continue to grow. In our future chapters, we will cover more ways you can start interacting with DeFi today.
Further Readings
About PayTrie
PayTrie is Canada’s premier stablecoin gateway enabling you to get started exploring the world of DeFi. With our low 1% all inclusive, no hidden fee, ultra fast transfer, and quick KYC, you can get started today for free.
About Argent
Argent is the first non-custodial crypto wallet to have the ease of use and security of the best new bank apps — without the bank. Recover it without a seed phrase, lock and unlock, and earn interest with Maker and Compound in a tap.
About Maker
Maker is a decentralized organization dedicated to bringing financial stability and transparency to the world economy. Maker enables the generation of Dai, the world’s first unbiased currency and leading decentralized stablecoin.
Disclaimer: This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. Charts, graphs and references to any digital assets are for informational and illustrative purposes only. The content speaks only as of the date indicated. DSR is subject to change and fluctuation.
