Cryptocurrencies unlocked the world of decentralized finance, and this industry has attracted millions of users worldwide. DeFi offers many earning opportunities, and considerable gains are possible if you make strategic transactions. So, is it wise to convert DAI to FTM?

It depends on the market situation and how the transaction fits your strategy. To better understand both assets, we have a guide that will reveal more about DAI and FTM. Keep reading to discover more details about these tokens and projects!

What Is DAI?

Dai is an algorithmic stablecoin issued on the Ethereum network. It’s connected to the US dollar and it aims to keep the 1:1 value. Instead of keeping fiat reserves like BUSD, DAI uses smart contracts for locking crypto assets to keep the token’s worth. 

The token is decentralized and uses algorithms that recognize market changes and perform adjustments to maintain a steady price. DAI uses stabilization mechanisms like CDP smart contracts and the MKR token.

DAI’s current price is $0.99 and its market cap is $5.34 billion. There’s no maximum supply, with the current coins in circulation set at around 5.34 billion. If you’d like to compare this token to RippleLite, you can check the XPL price and learn more about its changes. 

What Is FTM?

Fantom is a blockchain platform powered by smart contracts and using an original Lachesis PoS consensus mechanism. Its main goal is to offer a decentralized and secure option that will resolve scalability issues traditional platforms like Ethereum have.

FTM coin serves for payments and covering the network fees, as well as for governance and voting on crucial decisions. Users can stake FTM tokens and become validators to earn rewards.

A single FTM token is worth $0.212. About 88% of the total token supply is in circulation, with the maximum set at 3.175 billion FTM coins. The project’s market cap is $568 million.

Factors Influencing Profitable Transactions

Before you choose to convert DAI to FTM, read the following paragraphs to learn which factors can influence the transaction’s profitability!

Market Timing

The crypto market is famous for its volatility, and coin prices can change quickly. That’s why leveraging favorable market conditions and recognizing the right trading moment is imperative. 

Leading technical indicators can help you determine future price fluctuations based on analyzing current factors. RSI, or relative strength index, and stochastic oscillator are some indicators worth using. Combine them with lagging indicators like Bollinger Bands and moving averages. These show trends from analyzing previous market data to give you more details about the desired token.

Transaction Fees

Each trade performed via a crypto exchange comes with a transaction fee. Your goal is to reduce these charges as much as possible to maximize profitability. You can try to look for low-fee networks when trading crypto coins. It’s also better to identify off-peak times when there’s no network congestion. If you avoid network clogs, you’ll pay less for the transaction.

Choosing the Right Exchange

The final step is to pick an exchange where you will convert DAI to FTM. First, confirm that the platform has both currencies in its portfolio. You can choose between decentralized (DEX) or centralized (CEX) exchanges, so let’s see why this selection matters!

Decentralized Exchanges

A decentralized exchange guarantees that users maintain control over their assets throughout the trading process. DEX platforms have a non-custodial approach, and they are based on trust, which minimizes the risk of hacker breaches and ensures you can’t suffer due to the platform’s liquidity issues. However, if you provide the wrong address or forget the wallet’s recovery phrase, the odds are you’ll lose funds forever.

Anonymity is another advantage offered by DEX. Most platforms won’t require you to sign up or provide personal details. All you need to execute a trade is to initiate it via the website. Popular DEX platforms that support DAI and FTM include Godex and SimpleSwap.

Centralized Exchanges

These platforms have a centralized authority that owns the exchange and is the middleman in transactions. CEX usually has a custodial approach, meaning you send the funds to their custody before the platform executes the transfer. Liquidity plays a vital role, and it’s the exchange’s task to secure it for the provided tokens. If a security breach happens or the CEX goes bankrupt, users lose their assets.

Centralized exchanges like Binance and Kraken support DAI and FTM. They have large trading volumes daily and offer simple and fast trades with an intuitive user interface. These platforms often offer crypto lending and additional financial services, but it’s necessary to register an account and provide personal data.

Your Path to Profitable DAI to FTM Transactions

The art of smart trades is in recognizing the right moment to execute a transaction. Converting DAI to FTM can be a wise call if it fits your portfolio, and your analysis confirms it’s worth acquiring Fantom tokens now. Don’t forget to rely on your intuition, too, especially since market timing is vital. Performing the transaction as soon as you identify the right moment is the way to maximize your profit from DAI to FTM transfers!