Hacker News Reader

I don't think you understand Dai. It's pegged to USD, meaning that it tries to be as stable as the USD, but is not actually backed by USD. KYC/AML issues are no different than those that apply to BTC (e.g., if you try to cash out BTC or Dai via a U.S. exchange for USD, you will need to pass U.S. KYC).

View on HN

This is not true, as far as I understand: The vast majority of DAI is backed by fiat currencies via a complex mechanism involving multiple outside parties. The earliest version of DAI was envisioned as being 100% unbacked, but the collateral requirements to make that feasible ended up being prohibitive.

No, currently DAI is backed by Ethereum. You only need to spend one minute on their website or subreddit to get this information. I follow them for a long time and never even heard of them being backed by fiat. They only try to use virtual goods like virtual gold, cryptocurrencies etc. as collateral.

Dai is not backed by Ethereum. Dai is backed by Ether.

Okay Mr. Pedant. Actually Dai isn't backed by either one. It's backed by an ERC-20 token called Pooled Ether.

Virtual gold is not "backed by ethereum" it is backed by gold. These are obviously the third parties I'm talking about.

No, you may be thinking of something else. DAI is backed by Ethereum held in a smart contract. It's not collateralized by fiat currencies right now.

Reply on news.ycombinator.com