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Dai

DAI · Field entry
StablecoinStablecoinsDeFi

The original crypto-collateralized dollar stablecoin, now part of the Sky Protocol

$1.000.02%Snapshot · October 4, 2026 · updates live
Market cap
$4.60B
24h volume
$70.40M
Rank
#29
Circulating
4.60B DAI
Max supply
No fixed cap
All-time high
$1.22 March 12, 2020

DAI price chart

7-day snapshot. Chart data from CoinGecko.

What is Dai?

Dai (DAI) is a dollar stablecoin created by MakerDAO in 2017 and generated by locking crypto collateral in smart contracts rather than by depositing dollars at a company. Since the 2024 rebrand to Sky, DAI shares its backing with the newer USDS and can be swapped one-for-one with it. It remains widely used in DeFi.

Utility Lens

What Dai actually does

Provides a dollar-pegged token created by a protocol, so people can borrow and transact in dollars on-chain without a bank account.

Real-world usage
establishedDAI has been used heavily across DeFi for lending, trading and collateral since 2018.
Token necessity
essentialThe token is the product; it is the dollar unit the protocol issues.
Decentralization
limitedIt is issued by smart contracts and governed by token votes, but much of its backing is centralized stablecoins and tokenized funds.
Track record
longLaunched in 2017; it survived the March 2020 Black Thursday crash, which left about $4.5 million of DAI temporarily unbacked.

How we rate

What it’s used for

People borrow DAI against crypto they want to keep, use it as a stable unit in DeFi lending and trading, and hold it in older integrations that have not moved to USDS. Holders can convert it to USDS at any time to access the Sky Savings Rate.

Role of the DAI token:

collateralpayments

Evidence of real use

  • DAI launched on Ethereum in December 2017 and converts one-to-one with USDS at no fee. Source
  • On March 12, 2020 ('Black Thursday') about $8.3 million of collateral was liquidated for zero DAI, and DAI traded as high as $1.11. Source
  • After Black Thursday, MakerDAO added USDC as a collateral type in March 2020. Source

How Dai works

DAI is created when someone locks collateral, such as ETH, in a protocol vault and borrows DAI against it. The borrower must keep the collateral value well above the loan; if it falls too far, the vault is liquidated and the collateral is auctioned to repay the debt. Borrowers pay a stability fee, and governance adjusts fees and collateral rules to keep DAI near $1.

In 2024 MakerDAO rebranded as Sky and introduced USDS. DAI and USDS now draw on the same backing and convert one-to-one in either direction. Think of DAI as the original version that many apps still support, and USDS as the upgraded version linked to the Sky Savings Rate. The governance token also changed, from MKR to SKY, so votes that once used MKR now use SKY. For a holder, the practical difference is mainly which apps accept each token and which savings rate applies.

No company redeems DAI for bank dollars, and there is no accountant's attestation; the backing is visible on-chain and in Sky's reports. Holders exit by selling DAI or converting it to other stablecoins through the protocol. In the US, DAI is not issued by a licensed stablecoin issuer, and its treatment under the GENIUS Act is not settled as of October 2026.

Key moments

  1. 2017MakerDAO launches DAI on Ethereum, backed by ETH collateral.
  2. 2020On Black Thursday, zero-bid auctions leave about $4.5 million of DAI unbacked; USDC is added as collateral days later.
  3. 2024MakerDAO becomes Sky; DAI becomes convertible one-to-one into the new USDS.
  4. 2025SKY becomes the sole governance token, replacing MKR.

Supply

DAI has no fixed cap. It is minted when users borrow against collateral or swap stablecoins in, and burned when loans are repaid. Conversions to and from USDS also change DAI supply.

Risks to understand

  • Collateral concentration: a large part of the shared DAI/USDS backing is centralized stablecoins and tokenized funds.
  • Liquidation and market stress: sharp crypto crashes can overwhelm auctions, as Black Thursday showed in 2020.
  • Smart-contract and governance risk: code bugs or governance decisions could harm holders.
  • US regulatory uncertainty: The GENIUS Act, signed in July 2025, is expected to take effect on January 18, 2027. As of October 2026, Treasury, the OCC and the Federal Reserve had published proposed implementing rules, but final rules were still pending. DAI is not issued by a licensed issuer.

Dai FAQ

Is DAI being replaced by USDS?

USDS is the upgraded version, but DAI still exists and both convert one-to-one. Many apps support both.

Who controls DAI?

The Sky Protocol's smart contracts issue it, and SKY token holders vote on its rules. No single company issues or redeems it.

Has DAI ever lost its peg?

During Black Thursday in March 2020 it traded above $1, reaching about $1.11, as borrowers rushed to repay loans. It later returned to its peg.

Sources

  1. DAI vs USDS: what's the difference? — MetaMask
  2. Stablecoin Depegging History — Spark
  3. MakerDAO Adds USDC as DeFi Collateral Following 'Black Thursday' Chaos — CoinDesk
  4. MakerDAO rebrands to Sky, DAI stablecoin optionally upgradeable to USDS — The Block
  5. MKR to SKY Upgrade — Sky Ecosystem
  6. Treasury Seeks Public Comment on GENIUS Act Proposed Rulemaking — U.S. Department of the Treasury

Last reviewed October 4, 2026 by The Crypto Guide editorial team. Utility Lens ratings are editorial judgments, not investment advice. Market data from CoinGecko. Spot an error? Request a correction.