The article discusses how Single-Collateral DAI maintains its price stability pegged to 1 USD through various mechanisms. An Emergency Shutdown can be triggered during extreme conditions, allowing holders to redeem DAI at its collateral value of $1. Additionally, the DAI Savings Rate adjusts based on market dynamics; if the price exceeds $1, the rate decreases to curb demand, while it increases when the price falls below $1 to stimulate demand. These systems work together to stabilize DAI's value.
To maintain a stable peg to the US dollar, Single-Collateral DAI utilizes various mechanisms, most notably the Emergency Shutdown, which allows holders to redeem collateral at $1.
Another key element in preserving DAI's price stability is the DAI Savings Rate, which is adjusted based on market dynamics, allowing the system to respond to price fluctuations.
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