Dai (DAI) — Complete Guide

DAI is the original decentralized stablecoin, launched by MakerDAO in December 2017 and the first stablecoin to achieve significant DeFi adoption without centralized reserves. With a market cap consistently between $4–8 billion, DAI is over-collateralized by a diversified basket of on-chain assets including ETH, WBTC, stETH, and RWA (Real World Assets including US Treasuries). MakerDAO rebranded to Sky Protocol in 2024, introducing USDS as an upgraded DAI variant.

DAI is minted through Maker Vaults (previously Collateralized Debt Positions). Users lock collateral (ETH, WBTC, stETH, etc.) into a Maker Vault smart contract and mint DAI up to a collateralization ratio set by governance (e.g., 150% for ETH means $150 of ETH to mint $100 of DAI). If collateral falls below the liquidation ratio, automated keepers liquidate the vault and sell collateral to repay the DAI debt plus a stability fee (Maker's income). The Peg Stability Module (PSM) allows 1:1 swaps between DAI and USDC with no slippage, anchoring the peg. Since 2023, Maker has deployed billions into US Treasury bills via the RWA vaults, earning yield that funds the DSR (DAI Savings Rate).

• +Oldest battle-tested decentralized stablecoin — survived multiple market crashes since 2017
• +Governance fully on-chain via MKR token holders — no single controlling entity
• +Over-collateralized by diversified assets including ETH, WBTC, stETH, and US Treasuries
• +DAI Savings Rate (DSR) provides native on-chain yield currently around 6–8% APY
• +PSM allows 1:1 arbitrage swaps with USDC, providing strong peg stability
• +Deeply integrated into virtually every DeFi protocol as a trusted base currency

• !Heavy USDC backing via PSM means DAI inherits USDC's regulatory and counterparty risks
• !Governance risk: large MKR holders can pass malicious proposals if quorum is low
• !RWA exposure (~$2B in Treasuries) means DAI is not fully censorship-resistant