What could affect the price of DAI?
Dai’s stability faces a mix of risks and opportunities due to changing regulations, competition in decentralized finance (DeFi), and fluctuations in the value of its backing assets.
- Regulatory Changes – New U.S. and European laws might change rules about what backs Dai or require more transparency.
- DeFi Yield Competition – Dai’s low interest rate (1.5%) is much less than competitors like USDe (9-11%), which could cause users to switch.
- Backing Asset Volatility – Big price swings in Ethereum (ETH) and Wrapped Bitcoin (WBTC) could challenge Dai’s safety buffers.
In-Depth Look
1. Regulatory Changes (Mixed Effects)
What’s Happening: The U.S. GENIUS Act, coming in July 2025, bans stablecoins that pay interest but allows some “rewards” programs as a workaround. In Hong Kong, new rules require full identity checks (KYC) on stablecoins tied to local currencies like HKD and RMB. This could limit Dai’s use in Asia unless MakerDAO, the organization behind Dai, complies with these rules.
Why It Matters: Dai’s decentralized design helps it avoid direct bans in the U.S., but it might lose market share in places with strict rules if competitors like USDC use advanced privacy tech such as zero-knowledge proofs (ZKPs). Different regional regulations could also split liquidity, making it harder to use Dai globally (Gate.com).
2. Competition in DeFi Yields (Negative Impact)
What’s Happening: Dai offers about 1.5% interest, which is much lower than Ethena’s USDe stablecoin (9-11%) and Coinbase’s rewards programs. Some DeFi platforms like Nexo even offer up to 14% APY on Dai deposits. However, whether users stay depends on MakerDAO’s ability to offer competitive products.
Why It Matters: Lower interest rates could push users to move their money to higher-yield options, reducing Dai’s appeal as a place to save or earn interest. Still, Dai’s strong backing (overcollateralization) makes it a safer choice during market downturns (Coinspeaker).
3. Backing Asset Health & Liquidation Risks (Mixed Effects)
What’s Happening: Dai’s $5 billion supply is backed by assets like ETH, WBTC, and some real-world assets. If ETH’s price drops by 30%, it could trigger mass sell-offs or “liquidations,” as happened in March 2025 when MakerDAO liquidated $120 million worth of vaults.
Why It Matters: MakerDAO requires users to keep 150% collateral backing to protect Dai’s value. But if prices fall sharply, forced sales could temporarily cause Dai to lose its $1 peg. Keeping an eye on how ETH and BTC prices move together and the exposure to real-world assets like Treasury bills is important (Yahoo Finance).
Conclusion
Dai’s price stability depends on balancing its decentralized nature with adapting to regulations, improving interest rates, and maintaining strong collateral. While its $5 billion market size shows it’s a key player in DeFi, failing to close the yield gap or handle major collateral shocks could challenge its $1 peg. Will MakerDAO’s shift to USDS under the Sky rebrand weaken Dai’s role, or strengthen it as a decentralized safe haven?
What are people saying about DAI?
Dai’s role as a stablecoin is sparking debate between its decentralized benefits and potential risks. Here’s what’s trending:
- Hackers are using DAI to convert stolen Ethereum (ETH), raising concerns about liquidity and misuse.
- DeFi’s growth with DAI is strong, but its yield (earnings) options lag behind centralized competitors.
- Regulators are stepping in, with some exchanges removing DAI due to compliance worries.
Deep Dive
1. Hacker’s $45M DAI stash fuels ETH buys – bearish
A hacker linked to Coinbase reportedly holds $45.36 million worth of DAI in two wallets after swapping stolen ETH. They are likely to keep buying ETH with these funds.
– Source: @OnchainLens
What this means: This is a negative sign for DAI’s reputation because its liquidity is being used for illegal activities. However, it also shows that DAI has strong market depth, meaning it can handle large transactions.
2. Yield wars heat up – neutral
Mainstream crypto wallets are encouraging users to earn passive income with DAI, making it easier to earn without complicated tracking.
– Source: @TrustWallet
What this means: This is neutral for DAI. While it offers about a 4.5% yield, this is lower compared to other stablecoins like USDC and USDT, which offer higher returns.
3. EU exchange delists DAI – bearish
Bitvavo, a European crypto exchange, announced it will remove DAI from its platform by December 20, 2024, citing regulatory compliance concerns and declining user interest.
– Source: @Bitvavo
What this means: This is a negative sign for DAI’s adoption in regulated markets. New rules similar to the EU’s MiCA regulations are putting pressure on decentralized stablecoins, even though DAI still has a large market cap of $5.36 billion.
Conclusion
The outlook on DAI is mixed. It’s praised for its role in decentralized finance (DeFi) and its decentralized nature, but it faces criticism for being used by hackers and facing regulatory challenges. Keep an eye on the DAI/USDC trading pair spread, which recently widened to 0.03% (Gate.io), indicating changing preferences among stablecoin users.
What is the latest news about DAI?
Dai is facing security challenges while also seeing new ways to earn interest as more people use stablecoins. Here are the key updates:
- $21M DAI Stolen in Hyperliquid Hack (October 10, 2025) – A private key leak shows risks with custodial wallets.
- DAI Yields Up to 14% on Nexo (October 10, 2025) – Platforms compete to offer better returns on stablecoin deposits amid changing regulations.
- Stablecoin Market Cap Surpasses $300 Billion (October 3, 2025) – DAI ranks fourth with $5 billion, showing the market’s growth and maturity.
In-Depth Look
1. $21M DAI Stolen in Hyperliquid Hack (October 10, 2025)
What happened: A user of Hyperliquid, a decentralized trading platform, lost 17.75 million DAI (worth $21 million) after their private key was compromised, according to blockchain security firm PeckShield. The stolen funds were quickly moved to the Ethereum network. Private key thefts have increased sharply in 2025, with over $2 billion stolen in the first half of the year. This incident raises questions about Hyperliquid’s security measures.
Why it matters: This event highlights ongoing risks in managing private keys and the security of decentralized platforms. While DAI itself wasn’t hacked, such incidents emphasize the need for better user education on protecting private keys and improving protocol security. (The Block)
2. DAI Yields Up to 14% on Nexo (October 10, 2025)
What’s new: Nexo now offers up to 14% annual percentage yield (APY) on DAI deposits through fixed-term staking, according to Coinspeaker. Other platforms like Bybit (8.2%) and Binance (7.62%) also offer competitive rates. These higher yields come as demand grows for decentralized stablecoins following the U.S. Stablecoin Act, which bans interest payments but allows “rewards” as a workaround.
Why it matters: Higher yields show that DAI is increasingly used in both decentralized finance (DeFi) and centralized finance (CeFi) to earn returns. However, risks like platform failure and software bugs remain. This makes non-custodial options like MakerDAO’s Sky Protocol attractive for users wanting more security. (Coinspeaker)
3. Stablecoin Market Cap Surpasses $300 Billion (October 3, 2025)
Market update: The total market value of stablecoins reached $301.6 billion, driven by growing DeFi use and clearer regulations. DAI holds $5 billion (about 1.66% of the market), ranking fourth behind USDT ($176 billion), USDC ($74 billion), and USDe ($14.8 billion). Citi predicts the stablecoin market could grow to between $1.9 trillion and $4 trillion by 2030, with DAI benefiting from tokenizing real-world assets (RWA).
Why it matters: DAI’s decentralized governance and overcollateralization set it apart from fiat-backed stablecoins. While its growth is slower, DAI’s resistance to censorship and reversibility issues with competitors like USDC may boost its appeal in DeFi and cross-border payments. (CoinSpeaker)
Conclusion
Dai is balancing security risks with growing demand for yield, maintaining its position as a key decentralized stablecoin amid a rapidly expanding market. As regulators tighten rules on centralized stablecoins like USDC, DAI could see increased adoption, especially for international payments.
What is expected in the development of DAI?
Dai’s development is moving forward with these key updates:
- Governance Changes with Core Council (Q4 2025) – Switching to a governance system where elected representatives make important decisions.
- Staking Updates with Protections Against Liquid Staking Derivatives (2026) – Introducing rules that require token holders to lock up their tokens to prevent risks from liquid staking.
- USDS Joins Hyperliquid’s USDH Stablecoin (September 2025) – Partnering to increase the use of USDS in decentralized finance (DeFi) through new opportunities.
In-Depth Look
1. Governance Changes with Core Council (Q4 2025)
What’s happening:
Sky Protocol (previously known as MakerDAO) plans to create a "Core Council" made up of elected members who will handle major decisions. This replaces the current system where all token holders vote directly. The goal is to make decision-making faster and more efficient, especially for upgrades and managing risks (Blockworks).
Why it matters:
This change is neutral for Dai (DAI) and its new version USDS. While having elected representatives could speed things up, it might also reduce the level of decentralization, which is important to many users. The success of this change depends on finding the right balance between efficiency and community trust.
2. Staking Updates with Protections Against Liquid Staking Derivatives (2026)
What’s happening:
Sky’s plan includes new rules for staking that require SKY token holders to lock their tokens to participate in governance. This is designed to stop liquid staking derivatives (LSTs)—which can concentrate voting power—from taking over the decision-making process (Blockworks).
Why it matters:
This is positive for the stability of Dai’s ecosystem. By limiting risks related to LSTs, the protocol becomes more resistant to market manipulation. However, locking tokens might discourage some users who prefer more flexibility with their assets.
3. USDS Joins Hyperliquid’s USDH Stablecoin (September 2025)
What’s happening:
Sky has teamed up with Hyperliquid to support its USDH stablecoin. This partnership offers attractive yields of 4.85% and access to $2.2 billion in liquidity through a Peg Stability Module. The goal is to grow the use of USDS in trading and DeFi applications (Cryptotimes).
Why it matters:
This is positive news for USDS and, by extension, Dai, as it helps expand their role in the growing DeFi market.
What updates are there in the DAI code base?
Dai’s recent updates focus on expanding support across different blockchains and improving the protocol itself.
- Cross-Chain Support Expansion (August 2025) – Dai now works better with Solana and Polkadot blockchains.
- USDS Stablecoin Integration (October 2024) – Dai holders can swap their tokens 1:1 for USDS through the new Sky Protocol.
Deep Dive
1. Cross-Chain Support Expansion (August 2025)
Overview: MakerDAO has improved Dai’s ability to move smoothly between Ethereum, Solana, and Polkadot blockchains. This helps reduce the splitting of decentralized finance (DeFi) liquidity across different networks.
The update included launching new bridge contracts and making cross-chain transactions more cost-effective. Developers also integrated LayerZero’s omnichain messaging protocol, which allows secure and trustless transfers between blockchains.
What this means: This is positive news for Dai because it increases its usefulness across multiple blockchain platforms, which could lead to higher demand. Users benefit from faster and cheaper transactions outside of Ethereum.
(Source)
2. USDS Stablecoin Integration (October 2024)
Overview: MakerDAO has rebranded as Sky Protocol and introduced USDS, a new stablecoin that can be exchanged 1:1 with Dai. USDS offers improved governance features.
USDS works similarly to Dai in terms of collateral backing but adds a dynamic savings rate controlled by SKY token holders. This upgrade involved updating DaiJoin adapters to support both minting and burning in a way that works with existing systems.
What this means: This change is neutral for Dai in the short term. While USDS might gradually attract some demand, current liquidity remains stable. Dai holders still have the option to use their tokens as before, and developers now have tools to create yield-generating stablecoin products.
(Source)
Conclusion
Dai’s latest updates focus on making it easier to use across multiple blockchains and modernizing governance. This positions Dai for broader adoption while keeping its core stability intact. The key question is whether USDS’s new yield features will speed up adoption without reducing Dai’s main value.