Guide to Converting Grain

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There are two main risks I can see to holding your Dai on Coinbase rather than converting immediately do USD and shipping it to your bank account:

  1. There is risk in holding Dai (Maker might fail catastrophically somehow)
  2. There is risk in holding anything on an exchange (Coinbase is an exchange)

For the short and medium term, I trust holding onto Dai because the token has done a good job in the last few years through extremely volatile market conditions in holding reasonably to its dollar peg. I trust the Maker community to continue caring about this and doing what it needs to do, as it has for the last few years. It’s definitely more high risk than just converting to USD and sending it to your FDIC insured bank account tho.

The risks in holding anything on an exchange: an exchange is not an FDIC insured bank account. If you get hacked, if the exchange goes under, if the exchange for some reason decides not to allow you access to your tokens, you don’t really have any remedy. I would argue that Coinbase is one of the more trustworthy and institutionalized exchanges in terms of not being afraid that they’ll just exit scam everyone and run off with your Dai, but this is a lot of trust to veteran Crypto people who will always recommend that you hold your tokens (including Dai) in a wallet where you hold whole custody of your private keys. This can be a hardware wallet (I use a Ledger Nano S) or it can be a “paper wallet”, there are also other wallet apps that I am less familiar with. No matter which way you end up going though, do set up “2fa” (2 factor authentication) on your Coinbase accounts. Be safe!

I am happy to help people set up and understand a paper wallet, or think through/talk through using a hardware wallet.

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Seth I just watched your video, this is fantastic. Your idea to walk through the steps in a different format is super accessible, would you mind if I included a link to it in the doc?

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Thx! Feel free to use

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Thanks for the streamlined version LB, I’ll definitely incorporate it into the main doc. I just learned from some comments above that you can transfer DAI straight into your CoinbasePro wallet, so you’re definitely right that the process can be streamlined. In response to your earlier comment on the Select Market, I’ll make sure this is clearer.

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Great questions. I definitely agree that this guide can be more step-by-step. The reason I’m using Discourse is to get these questions and see what’s intuitive and what’s not, so nothing is left out. Hopefully after I’m finished editing (with help from comments lovely humans who left replies, like yourself) it will be more streamlined. Now to your questions (which I’ll incorporate into the document more):

  1. A Limit Price is the price you’re choosing to buy/sell at. If you’re selling DAI for USD, and you want to sell when 1 DAI = 1.0007 USD or more, then 1.0007 is your limit price. In setting that price, you’re saying “I want my DAI to be worth this much for me to sell.”

  2. The green and orange numbers on the left under “Order Book” are the fluctuating prices. The reason they’re moving is that the price is constantly changing by around .0001.

  3. The limit price you select affects how much USD you get in exchange for your DAI. Depending on how much you’re transferring, it may not make much difference at all. If you’re transferring a couple thousand DAI, I would suggest setting the limit price to whatever DAI is currently selling for (the fluctuating numbers in green ad orange on the left hand side). If you’re transferring something like 20,000 DAI, you could wait for DAI to be worth slightly more, such as 1.001, to get more USD. However, you will not get your USD until DAI reaches this price, and there is no guarantee it will.

  4. If the order has not gone through yet, such as if you set your Limit Price higher than DAI are currently worth, then yes. If you hit “Orders” in the top right, it will show you any orders that have not yet gone through. On the right of the listed order, there is a small “x” you can use to cancel the order. If your limit price has been met by the current price of DAI, you cannot change your order.

  5. Yes, you hit Place Sell Order after setting your Limit Price.

Thanks for finding the holes in this first draft, as you can see it’s a pretty in-depth process, so I’m not surprised I missed some steps. :slight_smile:

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Definitely nixing the Coinbase part of the equation, currently making sure the final edit is exact to how it works with CoinbasePro. Also, I like that you explain why it’s called Deposit, it’s teaching people how to actually understand CoinbasePro rather than just how to use it. Can I use this in the document and give you props?