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Originally Posted by DrTiTus
I don't understand it.
I'm either just too old, or it's just too complex.
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You send it Eth, it gives you Dai. Dai is worth $1 US.
You send back the amount of Dai it gave you, you get your Eth back.
Think of it as pawn broking. You give it something of value (Eth) and it loans you dai. When/if you want your collateral back, you pay it back.
If you don't pay it back, and the value of Eth falls below a threshold, it sells your collateral.