What could affect the price of DAI?
DAI’s $1 value peg is under pressure from new regulations, growing competition, and risks tied to its collateral.
- Regulatory Changes – Compliance with the GENIUS Act may challenge DAI’s decentralized setup.
- Stablecoin Competition – New stablecoins like MetaMask’s mUSD and MakerDAO’s USDS upgrade threaten DAI’s position in decentralized finance (DeFi).
- Collateral Risks – Fluctuations in ETH prices could impact DAI’s backing and stability.
Deep Dive
1. Regulatory Scrutiny (Bearish/Mixed Impact)
Overview: The U.S. GENIUS Act, passed in July 2025, requires stablecoins to hold reserves fully backed by U.S. Treasuries. This favors centralized stablecoins like USDC. DAI, which is backed by decentralized assets such as ETH and real-world assets (RWAs), may face challenges meeting these rules. In Europe, the MiCA regulation demands that 60% of reserves be held in EU banks, which could limit DAI’s liquidity worldwide.
What this means: If DAI’s governance can’t adjust to these reserve rules, it might lose market share. However, its decentralized nature could still attract users in places where centralized oversight is less welcome (GENIUS Act).
2. Competitive Pressures (Bearish Impact)
Overview: MetaMask launched mUSD in August 2025, a stablecoin with built-in yield-earning features. Meanwhile, MakerDAO rebranded to Sky Protocol and introduced USDS, a DAI successor offering better savings rates. Currently, DAI’s daily trading volume is about $94 million, which is much lower than USDT’s $58 billion and USDC’s $12 billion.
What this means: Users might switch to USDS or mUSD, reducing demand for DAI and increasing the risk of its price falling below $1. In fact, USDS surpassed DAI’s market cap within just three months of its launch (CoinJar).
3. Collateral & Liquidation Risks (Mixed Impact)
Overview: Around 45% of DAI is backed by volatile assets like ETH. If ETH’s price drops by 30%, it could trigger large-scale liquidations similar to the $120 million selloff in March 2025. MakerDAO maintains a 145% collateral ratio to protect against this, but it depends heavily on ETH’s price stability.
What this means: ETH’s rise to $4,780 in August 2025 has strengthened DAI’s collateral. However, a sudden price drop could force DAI supply reductions or temporary dips below $0.995 (Lookonchain).
Conclusion
DAI’s ability to maintain its $1 peg depends on successfully navigating new regulations, staying ahead of competitors like USDS and mUSD, and relying on ETH’s price strength. While its decentralized approach appeals to certain users, centralized stablecoins and MakerDAO’s own upgrades present significant challenges.
Watch: Will the adoption of Sky Protocol’s USDS speed up DAI’s decline by the end of 2025?
What are people saying about DAI?
DAI is making headlines as a key tool for both large investors and hackers. Here’s what’s trending:
- Hackers are using DAI to exchange stolen Ethereum (ETH) – Over $45 million in DAI reserves have raised concerns.
- The Ethereum Foundation is selling ETH for DAI – More than $28 million in sales have sparked discussions about managing their funds.
- DeFi platforms are expanding DAI use – The rebranding of Sky Protocol and new listings on PerpDEX show growing adoption.
In-Depth Look
1. Hacker’s $45M DAI stash signals trouble
According to @Onchain Lens, a hacker currently holds $45.36 million in DAI after buying 4,863 ETH at around $2,569 each. This suggests the hacker might keep accumulating ETH.
What this means: This is a negative sign for DAI’s reputation. Large amounts of DAI connected to illegal activity could lead regulators to take a closer look at how DAI is used, which might affect its decentralized governance.
2. Ethereum Foundation’s $28M ETH-to-DAI swap is routine
@Wendy reports that an Ethereum Foundation wallet sold 6,194 ETH for $28.36 million in DAI, at an average price of $4,578 per ETH.
What this means: This is neutral for DAI. It’s common for institutions to convert ETH into stablecoins like DAI for managing funds. However, if many do this at once, it could put pressure on DAI’s backing system.
3. Sky Protocol rebrand boosts DAI’s role
@BitverseApp shares that the former MakerDAO project has rebranded as Sky Protocol and now offers $MKR trading pairs with DAI that allow zero-slippage trades.
What this means: This is positive for DAI’s usefulness. More integration with trading platforms means DAI could see higher demand as both a stablecoin and a tool for margin trading in decentralized finance (DeFi).
Summary
Opinions on DAI are mixed. Its privacy and liquidity make it popular among both legitimate investors and bad actors. Meanwhile, upgrades to the protocol aim to expand its use in DeFi. Keep an eye on the DAI Savings Rate (DSR)—if it rises sharply, it could signal growing interest from institutions holding DAI for more than just transactions.
What is the latest news about DAI?
DAI is navigating challenges in the decentralized finance (DeFi) space, facing both security issues and growing competition. Here are the latest key updates:
- Hacker Makes $41M Through DAI Swaps (August 20, 2025) – A hacker linked to a major 2024 attack on Radiant Capital converted stolen Ethereum (ETH) into DAI, increasing their profits.
- Ethereum Foundation Wallet Sells $28M in DAI (August 15, 2025) – A wallet connected to the Ethereum Foundation sold a large amount of ETH for DAI, sparking market talk.
- MetaMask Launches mUSD Stablecoin (August 14, 2025) – MetaMask introduced a new stablecoin, mUSD, aiming to compete with DAI in the DeFi market.
In-Depth Look
1. Hacker Makes $41M Through DAI Swaps (August 20, 2025)
Summary: A hacker linked to North Korea, responsible for a $53 million attack on Radiant Capital in 2024, took advantage of rising Ethereum prices by swapping stolen ETH for DAI. They sold 9,631 ETH for about 43.9 million DAI at an average price of $4,562 per ETH. Then, by buying back ETH at a lower price, their total holdings grew to $94.6 million.
What this means: DAI’s easy liquidity helped the hacker turn a profit, showing how stablecoins can sometimes be used in money laundering. This could lead to more regulatory attention, but because DAI operates in a decentralized way, it’s harder for authorities to intervene. (crypto.news)
2. Ethereum Foundation Wallet Sells $28M in DAI (August 15, 2025)
Summary: A wallet previously linked to the Ethereum Foundation sold 6,194 ETH for 28.36 million DAI, with an average price of $4,578 per ETH. This sale caused discussions about potential downward pressure on Ethereum’s price. The Foundation later clarified that it no longer controls this wallet.
What this means: This event doesn’t directly affect DAI’s value but shows how large organizations use DAI for managing their funds. Big DAI transactions like this can temporarily affect the availability of DAI in the market. (Binance News)
3. MetaMask Launches mUSD Stablecoin (August 14, 2025)
Summary: MetaMask, a popular crypto wallet, launched mUSD, a new stablecoin that earns yield and is backed by short-term U.S. Treasury securities. With partnerships involving companies like Stripe and Blackstone, MetaMask is making a strong push into DeFi.
What this means: This new stablecoin could reduce DAI’s market share in the short term because of MetaMask’s large user base (over 100 million users) and strong institutional support. However, competition might encourage DAI to improve its own technology and collateral strategies. (Cointribune)
Conclusion
DAI continues to be a key player in DeFi but faces challenges from both security threats and new competitors. Its decentralized design appeals to many users, but projects like mUSD are pushing the boundaries. The question remains: will DAI’s model of holding more collateral than the value it issues keep it ahead, or will users looking for higher returns switch to newer options?
What is expected in the development of DAI?
Dai’s roadmap focuses on growing its ecosystem, improving governance, and meeting regulatory requirements.
- Sky Protocol Transition (September 18, 2025) – MakerDAO will rebrand as Sky Protocol, changing its governance token from MKR to SKY and converting the stablecoin DAI into USDS.
- FRAX Integration (Q4 2025) – MakerDAO will partner with Frax Finance to expand liquidity and add more real-world assets as collateral.
- Multi-Chain Expansion (2026) – USDS will be available on multiple blockchain networks, including Ethereum Layer 2 solutions and others, to lower transaction costs and increase accessibility.
Deep Dive
1. Sky Protocol Transition (September 18, 2025)
Overview
MakerDAO is changing its name to Sky Protocol. Along with this, the governance token MKR will become SKY, and the stablecoin DAI will be replaced by USDS. DAI holders can swap their coins 1:1 for USDS using smart contracts. Starting September 18, 2025, there will be penalty fees for delaying this swap (CoinJar).
What this means
In the short term, this change is neutral for DAI holders because the 1:1 exchange keeps the value stable. Over time, the new Sky Protocol brand might attract more institutional users, but there’s a risk that some people will continue using the old DAI, causing fragmentation.
2. FRAX Integration (Q4 2025)
Overview
MakerDAO plans to integrate Frax Finance’s algorithmic stablecoin system. This will allow DAI to use a wider variety of collateral, including more real-world assets, and improve liquidity by connecting with Frax’s network. This move follows a community vote in June 2025 to back DAI with more real-world assets (The Defiant).
What this means
This is positive for DAI’s usefulness because it could increase demand for minting and borrowing DAI and make it easier to trade. However, relying on Frax introduces some risks since it depends on an external protocol.
3. Multi-Chain Expansion (2026)
Overview
Sky Protocol will launch USDS on Ethereum Layer 2 networks like Arbitrum and Optimism, as well as other blockchains such as Polygon and BNB Chain. This aims to lower transaction fees and make it easier to use USDS across different platforms.
What this means
This is good news for adoption because having USDS available on multiple blockchains makes it more accessible for decentralized finance (DeFi) and payment uses. The challenge will be keeping the stablecoin’s value consistent across all these networks.
Conclusion
Dai’s roadmap focuses on rebranding, working with other protocols, and expanding to multiple blockchains to better compete with centralized stablecoins. While updates like the FRAX partnership and Sky Protocol’s new governance could help growth, challenges remain around maintaining decentralization and meeting regulatory standards.
Will USDS’s rebranding attract more institutional users, or weaken DAI’s decentralized foundation?
What updates are there in the DAI code base?
I wasn’t able to find useful information to answer this question right now. The CoinMarketCap team is continuously updating my crypto knowledge, so if any important details become available, I should have them soon. Meanwhile, please feel free to choose another question or cryptocurrency for analysis.