Dai is a decentralized stablecoin built on top of the Ethereum blockchain. The token value is kept stable relative to the US Dollar through a series of complementary financial incentives. Solvency and stability of the token are not governed by any specific localities and possession does not rely on counterparty trust. All assets are backed by surplus collateral escrowed into publicly reviewable Ethereum smart contracts. Anyone can create Dai by locking Ethereum in a CDP (Collateralized Debt Position), and redeem their Ethereum by sending the proper amount of Dai to the same CDP smart contract. The protocol is governed by holders of an associated token called Maker (MKR).