Dai

Dai is a stablecoin that aims to stay pegged to the US dollar and is issued by a decentralized protocol. DAI, which runs on Ethereum, was developed by MakerDAO; the protocol took the name Sky in 2024 and introduced the new USDS stablecoin. DAI remains in circulation and can be converted to USDS at a one-to-one ratio through the protocol.

DAI is minted as debt against collateral deposited into vaults. The collateral's value has to be kept above the debt; if the ratio falls below a set threshold, the vault is liquidated by auction. Over time, stablecoins such as USDC and real-world assets such as tokenized US Treasury bills have also been added to the collateral mix, so DAI does not rely on crypto collateral alone. The Peg Stability Module (PSM) allows DAI to be swapped with certain stablecoins at a fixed rate, while the Dai Savings Rate (DSR) offers DAI holders a yield set by the protocol.

The risk of DAI deviating from the dollar relates to sharp falls in the value of collateral assets, dependence on centralized stablecoins and real-world assets in the collateral, and oracle and smart contract risks. On this page, Lzzo.com uses DefiLlama's dollar reference price; the series in the chart is also drawn from DefiLlama's historical data.