What is DAI?

DAI is a stablecoin that does not discriminate. Any individual or business can realise the advantages of digital money.
The DAI token lives on the Ethereum blockchain; its stability is unmediated by any central party, and its solvency does not rely on any trusted counterparties. All circulating Dai are generated from Maker Vaults and are backed by a surplus of collateral assets.

The DAI address is 0x8f3Cf7ad23Cd3CaDbD9735AFf958023239c6A063

Find out more about DAI here.

Is MAMA a stablecoin?

No, MAMA is not a stablecoin. Rather, MAMA aspires to become an algorithmic reserve currency backed by other decentralized assets. Similar to the idea of the gold standard, MAMA provides free-floating value its users can always fall back on, simply because of the fractional treasury reserves MAMA draws its intrinsic value from.

MAMA is backed, not pegged.

Each MAMA is backed by 1 DAI, not pegged to it. Because the treasury backs every MAMA with at least 1 DAI, the protocol would buy back and burn MAMA when it trades below 1 DAI. This has the effect of pushing MAMA price back up to 1 DAI. MAMA could always trade above 1 DAI because there is no upper limit imposed by the protocol. Think pegged == 1, while backed >= 1.

You might say that the MAMA floor price or intrinsic value is 1 DAI. We believe that the actual price will always be 1 DAI + premium, but in the end that is up to the market to decide.

How does it work?

At a high level, MAMA DAO consists of its protocol managed treasury, protocol owned liquidity, bond mechanism (minting), and high staking rewards that are designed to control supply expansion.

Bonding in the "Mint" page generates profit for the protocol, and the treasury uses the profit to mint MAMA and distribute them to stakers. With LP bond, the protocol is able to accumulate liquidity to ensure the system stability.