DAI is a USD-referenced stablecoin created by the Maker Protocol, now part of the Sky ecosystem. It is designed to stay near one U.S. dollar, but its market price can move away from that target. Unlike a bank deposit or a claim redeemable directly for dollars, DAI’s issuance and stability depend on on-chain collateral, protocol mechanisms, governance parameters, and market demand.
| Stat | Value |
|---|---|
| Price (USD) | $0.00 |
| Market cap | $0.00 |
| 24-hour change | 0.00% |
CoinGecko market values refresh automatically and can change at any time.
How DAI is issued
In a typical Vault, a user locks approved collateral and draws DAI against it. The position must satisfy a collateralization requirement set for that asset; if its value falls too far or debt grows too large, protocol liquidators can sell collateral to cover the debt and penalties. Repaying DAI reduces the Vault’s debt and returns eligible collateral. The exact collateral types, limits, fees, and liquidation rules can change through governance.
DAI also participates in other protocol modules and conversion mechanisms, so “every DAI is backed by a particular user’s ETH deposit” is too simple. The system tracks aggregate collateral and debt, uses price feeds, and can include different collateral assets. A stablecoin target is a goal supported by these mechanisms, not a promise that a market buyer can always sell one DAI for exactly one dollar.
How the peg is supported—and where it can fail
Collateral requirements, stability fees, liquidations, governance-set parameters, and conversion routes all affect supply and demand. A market may price DAI above or below one dollar when liquidity is stressed, collateral loses value, an oracle or smart contract fails, or confidence in governance changes. Overcollateralization can absorb some price movement, but it does not erase market, operational, or protocol risk.
DAI, MakerDAO, and USDS
The MakerDAO brand transitioned to Sky in 2024. DAI remains a distinct token; Sky’s current documentation lists a converter that exchanges DAI and USDS at a 1:1 ratio. USDS is not simply another ticker for the same contract: the tokens have separate contracts and product features. Users should verify the network and contract address before swapping or sending either token, and should read current governance and access terms.
Tokenomics
DAI has no fixed maximum supply in the way a capped mining coin does. Supply can expand when users draw DAI through approved protocol mechanisms and contract when debt is repaid or tokens are otherwise burned. It is intended as a stable-value payment and accounting unit, not as an ownership claim or a governance token. Governance rights in the current Sky ecosystem are associated with SKY, while DAI holders still face the stablecoin’s collateral, peg, liquidity, contract, and governance risks.
DAI is sometimes loosely called “algorithmic.” That label can hide its collateral-backed design and the role of governance. It is more useful to examine which assets support the system, how liquidations work, what conversion routes exist, and which contracts and authorities can change system parameters.
Social Media Sentiment
A r/MakerDAO discussion about the Sky rebrand and USDS shows users asking whether DAI would continue to exist and how the new token differed. Replies reflect confusion and concern as well as attempts to clarify the migration. One forum thread is not a measure of all holders’ views or current adoption. Read the Reddit discussion.
Last updated: 2026-10
Related Terms
See Also
- Why Algorithmic Stablecoins Keep Failing
- What Is Tokenomics — And Why It Determines Whether a Crypto Project Survives
- Real World Asset Tokenization: What It Actually Is
- Swap crypto with ChangeNOW
Sources
- Sky Protocol Docs — Vat and Vault Accounting — Describes the system’s collateral, debt, Vault accounting, and the conditions that govern drawing or repaying DAI.
- Sky Protocol Docs — Dai Token — Documents DAI’s ERC-20 token contract and its role as the user-facing token for the protocol.
- Sky Protocol Docs — DAI and USDS Routes — Lists the current DAI↔USDS converter and explains the one-to-one conversion route.
- CoinGecko — Dai — Displays the current DAI market listing and notes the supply-tracking context after the USDS transition.