DAI
MakerDAO's original decentralized stablecoin, still circulating at $4.6B alongside its successor USDS.
DAI is the original overcollateralized stablecoin issued by MakerDAO (now Sky Protocol), launched in December 2017. It remains one of the most deeply integrated stablecoins in DeFi — accepted in hundreds of AMM pools, lending protocols, and bridge contracts built over nine years. As of Q1 2026, DAI supply sits near $4.6B per DeFiLlama, while its successor USDS (~$9B) has overtaken it in raw size following the August 2024 rebrand. Both tokens remain fully convertible 1:1 via Sky's converter contract, and the underlying collateral pool is the same for both. DAI does not include the freeze function introduced with USDS — its original contract was designed to be fully permissionless and non-custodial.
- DAI supply approximately $4.6B as of Q1 2026 per DeFiLlama; combined DAI + USDS supply ~$13B, making Sky the third-largest USD stablecoin issuer.
- DAI launched in December 2017 as Single-Collateral DAI (ETH only); migrated to Multi-Collateral DAI in November 2019; over nine years of uninterrupted peg maintenance (with brief stress events below $0.99 in 2020 and 2022).
- No freeze function in the DAI token contract — addresses cannot be blacklisted at the token level, making DAI the most permissionless major stablecoin.
- On April 7, 2026, Binance converted all customer DAI balances to USDS 1:1, the largest single DAI→USDS migration event.
- DAI remains the dominant decentralized stablecoin in legacy DeFi positions on Arbitrum, Optimism, Polygon, and Gnosis Chain, where USDS has not yet reached equal depth.
Frequently asked questions
Is DAI being phased out?
Sky has made USDS the primary development focus, but DAI is explicitly maintained as an active token — not deprecated. Sky's governance maintains the 1:1 converter to let holders choose freely, and the underlying collateral pool is shared. On chains and protocols where USDS has not yet matched DAI's liquidity, DAI remains the practical option.
What backs DAI?
DAI is backed by a diversified collateral portfolio managed by Sky governance: crypto assets (ETH, wBTC, wstETH), a large USDC-backed Peg Stability Module (which lets USDC holders mint DAI 1:1 and vice versa), and tokenized real-world assets (Treasuries via Monetalis and BlockTower). The RWA and USDC components mean DAI is not fully censorship-resistant in practice — Circle can freeze USDC in the PSM, and RWA custodians can fail.
How does DAI maintain its $1 peg?
When DAI trades above $1, arbitrageurs mint new DAI by depositing collateral and sell into the market, restoring the peg. When it trades below $1, arbitrageurs buy DAI cheaply and repay vaults to receive excess collateral, reducing supply. The PSM provides direct 1:1 conversion with USDC for large amounts, making the peg extremely tight near $1 when USDC liquidity is deep.