DAI isn't so much a derivative of Ethereum, rather it is a dApp (decentralised app) that runs on the Ethereum smart contract technology.
ERC-20 tokens are the magic that enable second-layer "currencies" such as DAI and others to work on top of Ethereum. There are other tokens, even WBTC (Wrapped Bitcoin).
DAI itself is backed by a basket of token-based assets such as WBTC, WETH, USDC, USDT etc.
The Ethereum dApps are definitely a fun rabbit-hole to dive into, e.g. UniSwap, Synthetix and other DeFi applications.
The main problem as I see it is the transaction costs are very high (I looked into using UniSwap but it was going to cost > $50 to transact what I wanted). However, in the next few years the Eth2 improvements will help scale the network and hopefully see transaction prices fall.
ERC-20 tokens are the magic that enable second-layer "currencies" such as DAI and others to work on top of Ethereum. There are other tokens, even WBTC (Wrapped Bitcoin).
DAI itself is backed by a basket of token-based assets such as WBTC, WETH, USDC, USDT etc.
The Ethereum dApps are definitely a fun rabbit-hole to dive into, e.g. UniSwap, Synthetix and other DeFi applications.
The main problem as I see it is the transaction costs are very high (I looked into using UniSwap but it was going to cost > $50 to transact what I wanted). However, in the next few years the Eth2 improvements will help scale the network and hopefully see transaction prices fall.