What could affect the price of DAI?
Dai’s $1 value peg is facing challenges from new regulations, competition from other stablecoins, and how its system is managed.
- Regulatory changes – New rules in the U.S. and Europe may change what assets can back Dai.
- Yield competition – Other stablecoins like Ethena USDe offer higher returns (5.5%), putting pressure on Dai’s 1.5% savings rate.
- Collateral risks – 62% of Dai’s $5.36 billion backing comes from volatile assets like ETH and WBTC.
Deep Dive
1. Regulatory Scrutiny (Mixed Impact)
Overview:
The U.S. passed the GENIUS Act in June 2025, banning stablecoins that pay interest. Companies like Coinbase and PayPal now offer “rewards” instead of interest. Meanwhile, Hong Kong requires full identity checks (KYC) on stablecoins pegged to HKD or RMB, making cross-border use more complicated.
What this means:
Dai’s decentralized design helps it avoid outright bans, but it faces higher costs to comply with new rules. Currently, 23% of Dai’s reserves are in USDC, a centralized stablecoin, which could increase risk if regulations become stricter (Gate.com).
2. Yield Wars & DeFi Dynamics (Bearish Pressure)
Overview:
Ethena’s USDe stablecoin, with a market cap of $9.49 billion, offers a 10.86% yield by using staked ETH and futures hedging. In contrast, Dai’s Savings Rate (DSR) is only 1.5% after a governance vote in June 2025 (Yahoo Finance).
What this means:
Investors looking for higher returns may prefer USDe, causing Dai’s daily trading volume ($536 million) to drop by 34% compared to USDe. While Dai’s price briefly rose above $1 during market crashes, it lacks strong, ongoing demand to maintain that level.
3. Collateral Liquidation Risks (Bearish Catalyst)
Overview:
About 62% of Dai’s backing is in ETH and WBTC, which are volatile cryptocurrencies. If ETH’s price drops by 30% (similar to November 2024), it could trigger $1.2 billion in forced asset sales due to MakerDAO’s 145% minimum collateral requirement.
What this means:
Large liquidations could flood the market with Dai, risking its $1 peg. The October 15 Typus Finance hack, where $3.4 million in Dai was moved after an exploit, highlights how failures in decentralized finance (DeFi) can spread risk (Crypto.news).
Conclusion
Dai’s decentralized approach faces challenges from stricter regulations and competition offering higher yields. Keep an eye on the Dai Savings Rate and the amount of ETH backing Dai. Future improvements like adding multi-chain liquidity or backing with real-world assets (RWA) could help. It remains to be seen if MakerDAO’s move toward the Sky Protocol will attract new investors or increase reliance on USDC.
What are people saying about DAI?
DAI is at the center of some big conversations lately:
- Hackers prefer DAI – Over $45 million in DAI is still held by people who exploited Coinbase.
- Stablecoin leader – DAI ranks 3rd in market value at $5.36 billion and is known for being decentralized.
- Yield competition – DAI’s savings rate is 1.5%, which is lower than newer stablecoins like Ethena USDe.
Deep Dive
1. @OnchainLens: Hackers stockpile DAI to buy Ethereum (ETH)
"A hacker stole funds from a Coinbase user and converted $12.5 million in DAI to 4,863 ETH (priced at $2,569 per ETH). They still hold $45.36 million in DAI across multiple wallets."
– @OnchainLens (1.2M followers · 2.8M impressions · 2025-07-07 09:06 UTC)
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What this means: This is a negative sign for DAI’s reputation because large amounts linked to hacks could lead to selling pressure or increased regulatory attention. However, DAI’s price stability remains strong.
2. @TrustWallet: DAI’s strong position in decentralized finance (DeFi)
"Don’t let your stablecoins sit idle – TrustWallet’s built-in earn feature lets you easily earn yield on your DAI."
– @TrustWallet (4.7M followers · 890K impressions · 2025-07-13 16:11 UTC)
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What this means: This is positive for DAI adoption since popular wallets are adding ways to earn interest, making DAI more useful than just a way to send money.
3. @BitverseApp: MakerDAO rebrands as Sky Ecosystem, highlighting DAI’s legacy
"Formerly known as MakerDAO (the creator of DAI), now rebranded as Sky Ecosystem – launching 10x perpetual contracts with DAI as the main collateral."
– @BitverseApp (320K followers · 150K impressions · 2025-09-05 06:20 UTC)
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What this means: Neutral – While DAI remains a key DeFi asset, the rebranding shifts focus to new products, which might lessen the direct association with MakerDAO’s original brand.
Conclusion
The overall view on DAI is mixed. Its decentralized design and stable $1 price (with a small 30-day increase of +0.0425%) make it a reliable choice for institutions. However, the fact that hackers hold large amounts of DAI and the competition from stablecoins offering higher yields create challenges. Keep an eye on DAI’s circulating supply (currently 5.36 billion) for changes in demand, especially as Ethereum’s price continues to fluctuate.
What is the latest news about DAI?
Dai is facing challenges from stablecoin competition and security issues. Here are the latest updates:
- Hacked Funds Converted to DAI (October 15, 2025) – $3.4 million stolen from Typus Finance was moved to Ethereum and swapped into Dai.
- Circle Freezes DAI-Linked Wallets (October 14, 2025) – Hackers avoided USDC freezes by converting stolen Dai to USDC.
- Dai vs. Ethena USDe Stability Tested (October 14, 2025) – Dai stayed close to its $1 value during market stress, outperforming a riskier stablecoin called USDe.
In-Depth Look
1. Hacked Funds Converted to DAI (October 15, 2025)
What happened: Hackers exploited a weakness in Typus Finance’s system on the Sui blockchain, stealing $3.4 million. They moved the stolen money to Ethereum and converted it into Dai. This happened because Dai is widely used and easy to trade across different blockchains.
Why it matters: This shows that Dai is often used to move large amounts of money quickly after hacks, which raises concerns about its potential misuse for money laundering. (Crypto.News)
2. Circle Freezes DAI-Linked Wallets (October 14, 2025)
What happened: Circle, the company behind USDC, froze four Ethereum wallets linked to a $200–400 million hack at Coinbase. However, the hackers got around this by swapping 5 million Dai into USDC before the freeze. A blockchain analyst, ZachXBT, criticized the slow response and pointed out that Dai’s interchangeable nature makes it harder to control.
Why it matters: This event highlights Dai’s design that resists censorship but also shows risks when it interacts with more centralized stablecoins like USDC. (Cryptotimes)
3. Dai vs. Ethena USDe Stability Tested (October 14, 2025)
What happened: During a recent market downturn, Dai’s price briefly rose slightly above $1 before settling back, while Ethena’s USDe dropped below $1. Dai uses a system backed by collateral and governed by its community, while USDe relies on complex financial strategies focused on generating yield.
Why it matters: Dai’s steady performance makes it a safer choice for users who want stability, even though its 1.5% yield is lower than some competitors. (Yahoo Finance)
Conclusion
Dai continues to be strong in maintaining its $1 value and decentralized control. However, its use in laundering stolen funds and lower yields compared to other stablecoins present challenges. The question remains: will new regulations on cross-chain transactions push Dai to add more compliance features, or will it keep its resistance to censorship?
What is expected in the development of DAI?
Dai’s development is focused on improving governance, growing its ecosystem, and adapting to regulations.
- Core Council Governance (2026) – Moving to a simpler governance system for quicker decisions.
- Staking Changes (Q1 2026) – Adding token lockups and limits on certain staking activities to keep governance stable.
- Traditional Finance Asset Integration (2025-2026) – Bringing in real-world assets and working with financial institutions to back Dai.
Deep Dive
1. Core Council Governance (2026)
Overview: MakerDAO, now called Sky Protocol, plans to replace its current decentralized voting system with a “Core Council” to make decisions faster (Blockworks). This change aims to fix problems with low voter turnout and slow decision-making.
What this means: This change is neutral for Dai. While a more centralized governance could speed things up, it might reduce the level of decentralization that many Dai users value.
2. Staking Changes (Q1 2026)
Overview: Sky Protocol plans to reform staking by introducing token lockups and penalties for certain liquid staking tokens (LSTs). These measures are designed to discourage short-term speculation and encourage long-term commitment to the protocol.
What this means: This is positive for Dai if it works, as it could reduce selling pressure on SKY (formerly MKR) tokens and make governance more stable. However, stricter rules might discourage new users from participating.
3. Traditional Finance Asset Integration (2025-2026)
Overview: Sky Protocol is working with traditional financial institutions to add real-world assets like tokenized government bonds and credit lines as collateral for Dai. They are in talks with companies like Maple Finance and TrueFi to expand these options (S&P Global).
What this means: This is good for Dai’s usefulness and adoption because it adds more stable backing. However, it also brings regulatory challenges that could complicate compliance.
Conclusion
Dai’s roadmap aims to balance keeping decentralization with practical improvements to attract institutional users. While staking reforms and traditional finance partnerships could expand Dai’s use, the move toward centralized governance remains controversial. It will be important to see how Sky Protocol manages efficiency while maintaining community trust as Dai competes with other stablecoins like USDe.
What updates are there in the DAI code base?
Dai’s recent updates focus on better integration with the broader crypto ecosystem and meeting regulatory standards.
- Sky Protocol Transition (Q4 2024) – MakerDAO changed its name to Sky Protocol and upgraded DAI to a new stablecoin called USDS.
- ERC-20 Permit Functionality (2023) – Added a feature that lets users approve transactions without paying gas fees upfront.
- DaiJoin Adapter Upgrades (2022) – Improved how different types of collateral are added and managed across blockchains.
Deep Dive
1. Sky Protocol Transition (Q4 2024)
Overview: MakerDAO rebranded as Sky Protocol and introduced USDS, a new stablecoin that builds on DAI’s foundation. DAI remains available but is now considered a legacy token.
This change aims to make governance simpler and improve the system’s ability to grow. USDS keeps the same 1:1 value with the US dollar as DAI but adds new features like the Sky Savings Rate, which offers about 4.5% annual interest (as of July 2025), and better support for multiple blockchains. Users can easily swap DAI for USDS at a 1:1 rate.
What this means: This update doesn’t reduce DAI’s usefulness but suggests a gradual move toward USDS for more advanced decentralized finance (DeFi) applications. (Source)
2. ERC-20 Permit Functionality (2023)
Overview: Dai’s code now supports ERC-20 “permit,” a feature that lets users approve token transfers using digital signatures instead of paying gas fees upfront.
This makes it easier and cheaper to use Dai in decentralized apps (dApps) and wallets. For example, it simplifies lending on platforms like Aave or swapping tokens on Uniswap by reducing the steps and costs involved.
What this means: This is a positive development for DAI because it improves user experience and encourages more people to use it in DeFi. (Source)
3. DaiJoin Adapter Upgrades (2022)
Overview: The DaiJoin smart contracts were improved to make adding and removing collateral smoother and more efficient.
These upgrades allow new types of collateral, like wrapped Bitcoin (wBTC) and Ethereum (ETH), to be easily used in Maker Vaults. They also cut gas fees by about 15% and improved compatibility with Layer 2 solutions like Arbitrum, which help scale transactions.
What this means: This strengthens DAI by allowing more diverse collateral options and making the system more secure and cost-effective. (Source)
Conclusion
Dai’s updates strike a balance between maintaining the stability of the original DAI token and introducing new features through USDS. Technical improvements like gasless approvals and better collateral management help solidify its role in DeFi. The big question is whether USDS will eventually surpass DAI’s established presence and liquidity.