What could affect the price of DAI?

DAI’s $1 value is being tested by new regulations, risks tied to its collateral, and changes in decentralized finance (DeFi).

1. Regulatory changes – New U.S. and EU laws may change how stablecoins like DAI must comply.
2. Collateral risks – Price swings in Ethereum (ETH) and loan defaults could threaten DAI’s backing.
3. DeFi competition – New products like MetaMask’s mUSD and higher-yield options challenge DAI’s popularity.

In-Depth Look

1. Regulatory Scrutiny (Mixed Impact)

Overview: The U.S. GENIUS Act (passed June 2025) and the EU’s MiCA framework introduce stricter rules for stablecoins, including reserve requirements and audits. DAI’s decentralized setup means it doesn’t have a central issuer, which helps avoid some risks. However, because it relies on crypto assets like ETH and USDC as collateral, it could face challenges if regulators limit algorithm-based models or require more transparency.

What this means: DAI might gain an advantage if laws favor decentralized stablecoins over centralized ones like USDT. But if regulators push for DAI to include more traditional assets as collateral, it could lose some of its appeal as a purely DeFi-native stablecoin.

2. Collateral Volatility & MakerDAO Governance (Bearish Risk)

Overview: About 74% of DAI’s collateral is crypto (mainly ETH and wrapped Bitcoin), with 26% in real-world assets (Maker Docs). If ETH’s price drops sharply, some loans could become undercollateralized, leading to forced liquidations and a temporary reduction in DAI supply. For example, ETH fell 21% in August 2025 after Foundation sales, showing how volatile it can be.

What this means: The stability of ETH’s price is crucial for DAI to keep its $1 peg. A big drop could trigger a chain reaction of liquidations, putting pressure on DAI’s redemption system and shaking user confidence.

3. Stablecoin Competition & Yield Dynamics (Bearish Pressure)

Overview: New stablecoins like MetaMask’s mUSD (launched August 2025) and Ethena’s USDe (with a $5.7 billion market cap) offer higher interest rates and partnerships with institutions. DAI’s savings rate (DSR) is currently 4.5%, which is lower than USDe’s 9% (Crypto.news).

What this means: Users looking for better returns might switch to these competitors, lowering demand for DAI. However, MakerDAO plans to launch USDS, a successor to DAI, which aims to include built-in yield features to stay competitive.

Conclusion

DAI’s ability to maintain its $1 value depends on ETH’s price stability, how regulators treat decentralized stablecoins, and its success in competing with higher-yield alternatives. While DAI’s decentralized nature is a strong long-term advantage, short-term risks from ETH price swings and regulatory changes should be watched closely.

Key metric to watch: The relationship between ETH’s price and DAI’s supply — if ETH stays below $3,500 for a long time, it could challenge DAI’s collateral safety.

What are people saying about DAI?

DAI’s stability is being tested as hackers and large investors move millions, while its role in decentralized finance (DeFi) faces changes with a rebranding effort. Here’s what’s happening:

1. Hackers are using DAI – Over $57 million in DAI spent to buy Ethereum (ETH)
2. DAI is transitioning to USDS – Sky Protocol’s upgrade sparks discussion
3. DAI remains a top DeFi stablecoin – $140 billion in total value locked (TVL) and strong earning opportunities

Deep Dive

1. Hackers Using DAI to Buy ETH – A Warning Sign

According to @OnchainLens, a hacker linked to the Coinbase breach bought 4,863 ETH (worth $12.5 million) using DAI at a price of $2,569 per ETH. They still hold $45.36 million in DAI for future purchases.
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What this means: This is a negative signal for DAI’s reputation because large-scale illegal activity could attract regulatory attention. However, it’s important to note that DAI’s value remained stable during these transactions, showing its reliability as a stablecoin.

2. DAI’s Rebranding to USDS – Mixed Reactions

Sky Protocol announced that DAI holders can convert their coins to USDS on a 1:1 basis, gaining access to new features like the Sky Savings Rate. However, the original DAI will still be available.
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What this means: This change could be positive in the long run by adding new benefits, but it might cause confusion and slow down adoption in the short term. DAI’s current market value of $5.36 billion will be tested as users decide whether to switch to USDS.

3. DAI’s Strong Position in DeFi – A Positive Outlook

Yahoo Finance reports that DAI leads the DeFi space with $140 billion in total value locked across various platforms, even though USDC is still preferred for its straightforward fiat backing.
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What this means: This is a positive sign for DAI’s demand, as DeFi continues to grow with a $45 billion increase in TVL year-over-year. DAI plays a key role in lending and borrowing markets, despite competition from centralized stablecoins.

Conclusion

DAI is at a crossroads: it remains reliable for big transactions, both legal and illegal, but faces challenges from MakerDAO’s rebranding to USDS. Keep an eye on the USDS conversion rate through September 2025—if adoption is slow, DAI could remain DeFi’s trusted stablecoin despite newer alternatives. For traders, watching large DAI movements can provide clues about upcoming Ethereum market trends.

What is the latest news about DAI?

DAI is navigating some challenges, including hacker activity and regulatory attention. Here are the key updates:

1. Hacker Moves $94M in Stolen Funds Using DAI (August 20, 2025) – Stolen Ethereum was converted into DAI, showing how stablecoins like DAI are used for liquidity.
2. Ethereum Foundation Denies Selling DAI (August 13, 2025) – Clarifies that a wallet linked to the Foundation is no longer under their control, addressing market rumors.
3. DAI Remains a Top Stablecoin (August 30, 2025) – Despite growing competition, DAI holds its place as one of the top three stablecoins.

In-Depth Look

1. Hacker Moves $94M in Stolen Funds Using DAI (August 20, 2025)

Summary:
A hacker who exploited Radiant Capital converted stolen Ethereum (ETH) into 43.9 million DAI during a price surge, making about $41 million in profits. The hacker still holds a large amount of ETH and DAI, showing how DAI is used to quickly move large sums of money.

What this means:
This is neither good nor bad for DAI itself. It shows that DAI is highly liquid and easy to trade, but repeated hacks involving DAI might lead regulators to pay closer attention to how stablecoins are tracked. (Crypto.News)

2. Ethereum Foundation Denies Selling DAI (August 13, 2025)

Summary:
A wallet once connected to the Ethereum Foundation sold 1,695 ETH for 7.72 million DAI, causing some concern about big institutional sales. The Foundation clarified that they no longer control this wallet, which last received ETH back in 2017.

What this means:
This is neutral for DAI. The transaction was likely part of normal treasury management, but it shows how large DAI trades can influence market sentiment. (CoinMarketCap)

3. DAI Remains a Top Stablecoin (August 30, 2025)

Summary:
A Chinese market analyst praised DAI’s decentralized approach compared to other stablecoins like USDe and USDD. DAI’s model, which requires more collateral than the amount issued, and its 4.5% yield through the Sky Protocol, help it stay strong. DAI is currently the third-largest stablecoin by market value, with $5.4 billion.

What this means:
This is positive news for DAI. Its ability to stay stable and useful despite new European regulations (MiCA) and competition from institutional-backed stablecoins like USDC shows its important role in decentralized finance (DeFi). (Twitter)

Conclusion

DAI continues to hold its value and usefulness even while facing challenges from hacks and changing regulations. Its decentralized design appeals to DeFi users, but upcoming EU rules under MiCA may test how its collateral system works in the future.

What is expected in the development of DAI?

Dai’s roadmap is focused on growing its use, improving governance, and expanding its ecosystem strategically.

1. Multichain Vault Deployment (2025–2026) – Speed up DAI minting on new blockchain networks.
2. Institutional Vault Enhancements (Q4 2025) – Make it easier for businesses to borrow large amounts of DAI.
3. RWA Collateral Expansion (2026) – Increase the use of real-world assets as backing for DAI.

Deep Dive

1. Multichain Vault Deployment (2025–2026)

Overview
MakerDAO plans to launch Maker Vaults on more blockchains like Polygon and Gnosis Chain. This will let users create DAI directly on different platforms, supporting its goal to make DAI more available and liquid across multiple networks.

What this means
This is good news for DAI because using multiple blockchains can boost demand for decentralized stablecoins in growing decentralized finance (DeFi) areas. However, there are risks like security issues with cross-chain bridges and regulatory challenges around assets that operate on multiple blockchains.

2. Institutional Vault Enhancements (Q4 2025)

Overview
Updates to Institutional Vaults will simplify borrowing large amounts of DAI for companies. Features will include automated compliance checks and adjustable fees to keep the system stable.

What this means
This could be positive for DAI since more institutional use might stabilize its supply. But it also introduces risks, such as concentrating collateral in fewer hands. The key will be making borrowing easy while keeping strong collateral requirements.

3. RWA Collateral Expansion (2026)

Overview
MakerDAO plans to add more tokenized real-world assets (RWAs), like commercial real estate and government bonds, as collateral for minting DAI.

What this means
This is promising for DAI because using a wider variety of assets can help reduce the price swings common in crypto-backed stablecoins. Still, legal and regulatory hurdles around tokenizing real assets and complying with different jurisdictions could slow progress.

Conclusion

Dai’s roadmap emphasizes scaling through multiple blockchains, encouraging institutional use, and diversifying collateral—all important for keeping its status as a leading decentralized stablecoin in DeFi. With real-world asset integration and governance improvements on the horizon, the challenge will be balancing decentralization with real-world legal and compliance needs.

What updates are there in the DAI code base?

Dai’s technology has been updated and rebranded as Sky Protocol, with a focus on improving governance, stability, and integration with decentralized finance (DeFi).

1. Governance Token Update (October 2024) – The old governance token MKR was replaced by SKY to make decision-making more straightforward and decentralized.
2. Stablecoin Upgrade to USDS (October 2024) – Dai (DAI) can now be converted 1:1 to USDS, a new stablecoin with added features like earning interest.
3. Security and Stability Review (August 2025) – Sky Protocol received a B- rating from S&P, highlighting both its strengths and some risks.

Detailed Overview

1. Governance Token Update (October 2024)

What happened: MakerDAO changed its name to Sky Protocol and swapped its governance token MKR for a new token called SKY. Each MKR token was exchanged for 24,000 SKY tokens. This change was designed to make the system more decentralized and easier for users to participate in governance.

To encourage users to switch from MKR to SKY quickly, a penalty fee was introduced for those who delayed the conversion after September 18, 2025. Also, the smaller governance groups within the system, previously called SubDAOs, were renamed “Sky Stars” and given more focused roles.

What this means for you: This update is generally neutral for Dai and Sky Protocol users. It modernizes how decisions are made but may cause some short-term confusion. Users now have clearer voting power with SKY tokens, but those holding MKR need to manage the conversion process carefully. (Source)

2. Stablecoin Upgrade to USDS (October 2024)

What happened: Dai holders can now convert their DAI tokens to a new stablecoin called USDS at a 1:1 ratio using a smart contract. USDS keeps the same price stability as DAI but adds new benefits like the Sky Savings Rate, which allows users to earn variable interest, and Sky Token Rewards.

USDS uses the same system of backing tokens (collateral) as DAI but works with Sky Protocol’s improved lending and borrowing features. While the old DAI tokens still work, they don’t offer these new earning opportunities.

What this means for you: This is a positive development for the adoption of DAI and USDS. The added features could attract more users interested in earning yields through DeFi. However, having two similar stablecoins in use might cause some confusion or split the community over time. (Source)

3. Security and Stability Review (August 2025)

What happened: S&P Global gave Sky Protocol, including USDS and DAI, a credit rating of B-. They noted some risks, such as a significant portion (9%) of governance tokens still controlled by the founder, Rune Christensen, and exposure to volatile collateral assets like $950 million tied to Ethena’s USDe token.

Despite these concerns, S&P recognized Sky Protocol’s strong track record of very few defaults since 2020 and thorough smart contract security audits. However, cybersecurity risks remain a concern.

What this means for you: This rating is neutral for users. It shows that Sky Protocol is gaining recognition from traditional financial institutions, which adds credibility. At the same time, potential vulnerabilities might make cautious investors hesitant. (Source)

Conclusion

The transition from Dai to Sky Protocol marks a strategic move to make decentralized finance more mainstream. By introducing the USDS stablecoin and the SKY governance token, the project aims to offer better features and governance. Success depends on how smoothly users adapt to these changes. With a current market value of $5.36 billion, Sky Protocol faces growing competition in the stablecoin space but is positioning itself for long-term growth.