00:00When it comes to stablecoins, two giants represent opposite ends of the spectrum, Tether's US to the MakerDAO's DAI.
00:06US is the most widely used stablecoin in the world.
00:09It's issued by Tether, a centralized company that holds reserves mostly US treasuries, cash, and other assets to back every token one-time on this one with dollars.
00:18Because of its scale and liquidity, US dominates global crypto markets.
00:22But it comes with trade-offs, users must trust Tether's management, its audits, and its ties to traditional finance.
00:27DAI, on the other hand, is something very different.
00:30It's a decentralized stablecoin created by MakerDAO.
00:33Instead of being backed by a single company's reserves, DAI is collateralized by cryptoassets like ETH, RAP, BTC, and tokenized treasuries locked inside smart contracts.
00:42Anyone can open a vault, deposit collateral, and generate DAI.
00:46Its peg is maintained by incentives, governance, and over-collateralization.
00:50So what does this mean for users?
00:52With last, you get massive liquidity near universal exchange support and simplicity.
00:57But you're relying on a centralized issuer.
01:00With DAI, you get censorship, resistance, and transparency on-chain.
01:03But you face risks like collateral volatility, governance debates, and complex mechanisms to maintain stability.
01:09Interestingly, DAI itself has begun holding US and even US treasuries in its backing, blurring the line between decentralized and traditional.
01:15Meanwhile, US continues to expand as the stablecoin of choice in emerging markets, often acting as a digital dollar for people without access to banking.
01:24In short, US represents the centralized, liquidity-first path for stablecoins, while DAI is the experiment in decentralized money governed by code and community.
01:31Together, they show two competing visions of how digital dollars can work in the global economy.
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