May I ask what exchanges you are using? There is 1.5M in dai liquidity on uniswap and as you can see plenty of people are moving huge sums without incurring noticeable slippage.
So, if you are "just" holding DAI it makes little sense to use at the moment. But if you still want to have some exposure to more volatile assets (e.g, ETH) I'd recommend putting it an ETH/DAI liquidity pool from either Uniswap or Loopring. I wrote about the reasoning [0] before, but the short explanation is that such a liquidity pool softens the volatility swings and also allow you to receive a good amount through swap fees.
DAI is not scalable. See https://medium.com/@hasufly/maker-dai-stable-but-not-scalabl... for a detailed explanation as to why. Tldr: the supply of DAI is bounded by the demand for a particular kind of liquidity, which doesn't scale with demand for DAI.
Do Kwon was putting a lot of weight behind a stablecoin liquidity pool designed to cut out DAI, crv-4pool. Those who invested in the crv-4pool are left with lots and lots of UST and very little of the other FRAX, USDT or USDC.
https://curve.fi/4pool (Ethereum RPC wallet required to see stats)
USDC: 300,086.92 (4.73%)
USDT: 302,375.01 (4.76%)
UST: 5,443,729.24 (85.77%)
FRAX: 300,405.16 (4.73%)
There is one small issue with DAI in my eyes. It has been trading for a premium, while at the same time you can't make a profit from owning it because the spread is always an issue. I am testing an automated contract that does 3 way arbitrage between USDC/USDT/DAI and it has never once crossed over to DAI, while USDC/USDT cross each other enough to trigger a trade, 1-2 times a day.
Stablecoins. I can get 3-4% interest on holding DAI, and with this, I get to spend it as well. What's nice about holding DAI is that if I ever want to exchange it for crypto, I just send it to Uniswap. Never have to leave the ecosystem, and I have easy access to decentralized services.
The general consensus is that it's a terrible idea to rely on Uniswap (or any other dex) as a price oracle for valuation/pricing for other on-chain defi applications/dexes. With enough capital (which can be acquired through flash loans) you can absolutely perform economic attacks though atomic transaction chains involving moving the dex price. Uniswap, Kyber, and others will tell you the same thing. This makes me think that even things like DAI/MakerDAO (and anything that relies oracles like Chainlink) can start to get brittle when/if the major price discovery and liquidity are on Dexes.
This has been seen in practice, for example in the Fulcrum hack:
It's important to note that the vast majority of people who will own and use Dai have never and will never interact with the Maker protocol or CDP holders. You trade ETH to Dai on Uniswap and go about your day. You trade the Dai to ETH on Uniswap later. I'd expect most people just to go from fiat straight to Dai and back as well.
Maker itself is a system for the professionals and most users won't even know it exists and won't have to.
To add some info, USDC is 100% collateralised with USD and DAI is 165%+ collateralised with ETH.
Due to their actual stability (relative to other stablecoins), they're more likely to trade at a premium than at a discount.
About a year ago I traded 10,000 USDC for 12,100 USDT during a run on a certain DeFi bridge, only to trade it back to 12,080 USDC a couple hours later.
DAI is pegged to the US Dollar, stabilized by algorithms and has been for a few years now without fault. The upside is 20 - 30% APY by providing liquidity to decentralized exchanges. Bank accounts are providing no where near that return on currency.
https://uniswap.info/token/0x6b175474e89094c44da98b954eedeac...
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