5 Steps to Safely Buying Dai

by Lyle Daly | Published on Aug. 14, 2021

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If it's your first time buying the cryptocurrency Dai, make sure you know how to do it safely.

Dai (DAI) is one of your options if you're looking for a stablecoin that follows the U.S. dollar. It's also a rarity in that it doesn't have a central organization managing it. While most stablecoins have companies that work to maintain their prices, Dai is decentralized and uses smart contracts to keep the price at $1.

Buying crypto can be tricky, and it's possible to lose money if you're not careful. Follow these steps so that your Dai purchase goes smoothly.

1. Decide where you want to buy Dai

To get started, you're going to need an account on a cryptocurrency exchange. If you already have one, check whether the exchange has Dai for sale. Many of the best cryptocurrency exchanges list Dai, so you may be able to buy it right away through your current exchange.

If you haven't signed up with a crypto exchange yet, choose one that you like with a good reputation. Here are some quality exchanges that sell Dai:

2. Set up your exchange account

Setting up an account with a crypto exchange is normally a two-part process.

First, you provide some basic information, including your name, email address, and phone number. You also set up a password for your account and verify the email and phone number that you provided.

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That's how you create an account, but you also need to verify your identity. Exchanges use identity verification to comply with government regulations and ensure that clients aren't using cryptocurrency for illegal activities, such as money laundering.

For identity verification, the exchange will likely ask for all of the following:

  • Social Security number
  • Date of birth
  • Physical address
  • A scan of a valid ID document

3. Transfer money from your bank account

In most cases, a transfer from a bank account is the best way to buy crypto. Each exchange is different regarding which payment methods it accepts. The exchange you chose may also let you pay using credit cards, debit cards, or PayPal.

Those methods typically include extra fees that will cut into your purchase. Transferring money from a bank account is free with most reputable exchanges. There are still transaction fees to pay, but you don't get dinged with any unnecessary added costs, and that's important for cryptocurrency investing.

Bank account transfers aren't instantaneous. Expect it to take several business days before the funds are available in your exchange account.

4. Check the price

Since Dai is a stablecoin pegged to the U.S. dollar, it's designed to have a price of $1. There can be fluctuations here and there, but its smart contracts usually correct price movements quickly.

Before you buy Dai, check the current price. If it's $1 or less, then you can go ahead with your purchase. In the rare situation when it's above $1, you should wait to buy it so that you don't overpay.

It's normally not a good idea to try and time the crypto market. Stablecoins are an exception because of how they correct their prices.

5. Make the purchase

At this point, you're ready to buy. Choose the "Buy" option on your exchange's web platform or app. Select Dai as the cryptocurrency to purchase and enter how much of your balance you want to spend on it.

Your crypto exchange will provide a preview of the transaction, which includes how much you're spending, the amount of Dai you'll receive, and what the transaction fees are. Double check everything, and if you're satisfied, confirm the purchase.

That's the entire process for how to safely buy Dai. Once it's in your account, you can transfer it to a crypto wallet for safekeeping, send it to someone else, or lend it out and earn interest on it. Whenever you want to purchase more in the future, you can do so through your exchange account.

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