What could affect the price of DAI?
Dai’s $1 value peg is being challenged by new regulations, competition from other stablecoins, and decisions made by its governance team.
- Regulatory changes – The U.S. GENIUS Act bans interest on stablecoins, and Hong Kong enforces strict identity checks.
- Stablecoin competition – Higher-yield options like Ethena’s USDe are attracting users away.
- Governance updates – Sky Protocol’s fee reductions and migration to USDS affect how much Dai is available.
Deep Dive
1. Regulatory Pressures (Mixed to Negative Impact)
Overview: Starting July 2025, the U.S. GENIUS Act prohibits stablecoins from paying interest, forcing Dai to move away from its Savings Rate feature. In Hong Kong, new rules require full identity verification (KYC) for stablecoins tied to HKD or RMB, putting pressure on decentralized coins like Dai to comply or risk losing access to institutional investors (Gate.com).
What this means: Dai’s decentralized nature helps it avoid direct regulation, but it may fall behind more compliant stablecoins like USDC when it comes to institutional use. However, companies like Coinbase and PayPal might use “rewards” programs to offer benefits without breaking the yield ban.
2. Yield Competition (Negative Impact)
Overview: Ethena’s USDe stablecoin, with a market cap of $9.49 billion, offers attractive yields around 10.86% through low-risk strategies, pulling funds away from Dai’s modest 1.5% Savings Rate. Meanwhile, Sky Protocol (formerly MakerDAO) received a B- credit rating from S&P, citing concerns about weak capitalization (The Defiant).
What this means: Dai risks losing users in decentralized finance (DeFi) unless it can increase yields or use collateral more efficiently. In July 2025, Dai’s 7-day trading volume dropped 40%, while USDe’s volume jumped 62% (Yahoo Finance).
3. Protocol Upgrades (Positive Impact)
Overview: In September 2025, Sky Protocol moved to USDS, adding features like cross-chain liquidity pools and support for real-world asset collateral. A governance vote in June lowered Ethereum vault stability fees, which helped increase Dai issuance by 12% (Twitter).
What this means: Lower borrowing costs could lead to more Dai in circulation (currently $5.36 billion), and adding real-world assets as collateral helps protect Dai’s $1 peg during times when cryptocurrency prices, like Ethereum, are volatile.
Conclusion
Dai’s ability to maintain its $1 peg depends on balancing its decentralized principles with adapting to regulations and offering competitive yields. While upgrades like USDS migration and fee cuts may improve supply and stability, high-yield competitors and strict KYC rules remain significant challenges. Will Sky Protocol’s share of real-world asset collateral surpass 35% by 2026—a level that has historically reduced price volatility by 40%?
What are people saying about DAI?
DAI’s stablecoin status is making waves with hacker activity, moves by the Ethereum Foundation, and ongoing debates about returns. Here’s what’s happening:
- Hackers are using DAI – Over $45 million in DAI reserves are being used to buy Ethereum (ETH)
- Ethereum Foundation sells ETH for DAI – More than $28 million worth of ETH converted to DAI, sparking discussion
- DAI remains a top stablecoin – Holding the #3 spot in a market worth over $250 billion
In-Depth Look
1. Hacker’s DAI stash drives ETH purchases
“Coinbase exploit wallet holds $45.36M DAI, may deploy more for ETH”
– @OnchainLens (2.1M followers · 7.4M impressions · 2025-07-07 08:52 UTC)
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What this means: This is a short-term negative for Ethereum because stolen funds are being sold, putting downward pressure on ETH prices. However, it also shows that DAI is the go-to stablecoin for large crypto trades due to its strong liquidity.
2. Ethereum Foundation’s $28M ETH to DAI swap
“Ethereum Foundation-linked wallet sold 6,194 ETH for DAI at $4,578 avg”
– @EF_WalletTracker (896K followers · 3.2M impressions · 2025-08-13 05:05 UTC)
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What this means: This move is neutral for DAI’s value. It highlights DAI’s growing role as a reserve asset for institutions managing their funds, but also raises questions about how closely ETH and DAI prices might be linked.
3. DAI defends its #3 stablecoin position
“$5.36B market cap holds despite Ethena USDe’s 102% yield surge”
– @StablecoinWarz (412K followers · 1.8M impressions · 2025-08-13 11:01 UTC)
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What this means: This is a positive sign for DAI’s long-term outlook. Despite offering lower interest rates (around 1.5%) compared to competitors offering 5-15%, DAI’s decentralized governance through MakerDAO and its stable structure keep it competitive, according to Yahoo Finance.
Conclusion
The general view on DAI is cautiously optimistic. Its important role in large crypto transactions and decentralized management balances out challenges like lower yields and some exchanges dropping support (such as Bitvavo’s planned exit in 2024). Keep an eye on the DSR (Dai Savings Rate), currently at 1.5%, as it will signal MakerDAO’s next steps in the ongoing stablecoin competition.
What is the latest news about DAI?
Dai continues to adapt to changing regulations and security challenges while keeping its value close to one U.S. dollar. Here are the latest updates:
- Stablecoin Comparison: Dai vs. Ethena USDe (October 14, 2025) – Dai’s decentralized approach contrasts with USDe’s focus on earning yields.
- Typus Finance Hack Leads to $3.4M Converted to DAI (October 15, 2025) – Hackers moved stolen funds through Ethereum and swapped them into DAI.
- Circle Freezes Addresses After Coinbase Hack (October 14, 2025) – DAI was used in laundering $5 million, revealing gaps in compliance.
In-Depth Look
1. Stablecoin Comparison: Dai vs. Ethena USDe (October 14, 2025)
Summary:
A recent Yahoo Finance report compared Dai’s decentralized and overcollateralized system with Ethena USDe, a synthetic stablecoin backed by strategies designed to minimize risk. During a market drop on October 12, Dai’s price briefly rose to $1.0015 before settling back to $1.00, while USDe’s price fell to $0.9912. Dai offers a 1.5% savings rate set by its community governance, which is lower than USDe’s average 5.5% yield but provides greater transparency and stability.
What this means:
Dai remains attractive for users who prefer safety and stability over higher returns, especially during uncertain market conditions. However, in strong markets, some users might choose alternatives like USDe for better yields. (Yahoo Finance)
2. Typus Finance Hack Leads to $3.4M Converted to DAI (October 15, 2025)
Summary:
Typus Finance, a platform built on the Sui blockchain, was hit by a $3.4 million exploit involving its price oracle. The attackers converted the stolen funds into DAI through the Ethereum network. This caused Typus Finance’s token price to drop by 35%, but DAI’s value remained stable.
What this means:
This event shows that DAI is still widely used as a reliable asset for moving funds after hacks, highlighting its strong market presence. However, repeated hacks like this may push MakerDAO to improve how it tracks DAI moving across different blockchains. (Crypto.news)
3. Circle Freezes Addresses After Coinbase Hack (October 14, 2025)
Summary:
Following a $5 million theft from Coinbase, Circle froze four Ethereum Virtual Machine (EVM) addresses linked to the hack. However, the hacker quickly exchanged DAI for USDC and moved the funds before the freeze took effect. Blockchain analyst ZachXBT criticized Circle for acting too slowly.
What this means:
Because DAI operates in a decentralized way, stopping fraudulent transactions is challenging. This raises important questions about how to balance the benefits of decentralization with the need for regulatory compliance. It may also increase pressure to implement “travel rule” regulations for decentralized stablecoins. (Cryptotimes)
Conclusion
Dai’s decentralized design helps it stay stable during market ups and downs but also makes it vulnerable to cross-chain attacks. As regulators pay closer attention, Dai’s ability to maintain its dollar peg remains strong. The key question is whether MakerDAO’s governance can introduce stricter compliance measures without losing the benefits of decentralization.
What is expected in the development of DAI?
Dai’s development is moving forward with important upgrades and growth in its ecosystem.
- Sky Protocol Migration (Q4 2025) – MakerDAO is completing the switch from MKR to SKY tokens, with penalties for those who delay.
- USDH Stablecoin Launch Proposal (Q4 2025) – A plan to introduce Hyperliquid’s USDH stablecoin, backed by $2.2 billion in liquidity.
- MiCA Compliance Efforts (Ongoing) – Adjusting to new European Union rules to keep DAI listed on exchanges.
Deep Dive
1. Sky Protocol Migration (Q4 2025)
Overview: MakerDAO is rebranding as Sky Protocol and converting MKR tokens to SKY tokens at a rate of 1 MKR to 24,000 SKY. Starting September 18, 2025, holders who don’t convert their MKR tokens will face a 1% penalty every quarter. This change shifts governance control to SKY tokens and phases out MKR’s role (Blockworks).
What this means: This change doesn’t directly affect Dai (DAI), since the focus is moving toward USDS, the new stablecoin. However, SKY’s governance could make decision-making smoother, which may help keep DAI’s backing stable.
2. USDH Stablecoin Launch Proposal (Q4 2025)
Overview: Sky Protocol plans to issue Hyperliquid’s USDH stablecoin, which offers a 4.85% yield and includes a $25 million fund to support decentralized finance (DeFi) projects. USDH will work across multiple blockchains using LayerZero technology (Crypto.news).
What this means: This is positive for the Dai ecosystem because USDH could increase liquidity across different protocols. However, there’s a risk that USDH might compete with DAI and USDS, and its success depends on Hyperliquid’s growth.
3. MiCA Compliance Efforts (Ongoing)
Overview: Some European exchanges, like Bit2Me, are removing stablecoins that don’t comply with the EU’s new MiCA regulations. DAI remains listed but faces increased scrutiny due to its decentralized nature. Sky Protocol is working to improve transparency to meet these rules (Bit2Me).
What this means: In the short term, compliance costs may be a challenge, which could negatively impact DAI. But in the long run, meeting regulations could help DAI maintain its presence in Europe and attract institutional investors.
Conclusion
Dai’s future involves modernizing its protocol through Sky, expanding its ecosystem with USDH, and adapting to regulatory changes. While USDS adoption is slower than expected, DAI remains an important decentralized option. The key question is whether Sky’s integrated approach will drive growth or if regulatory pressures will reduce decentralization.
What updates are there in the DAI code base?
Dai’s recent updates focus on improving the protocol and boosting security.
- USDS Migration (September 2025) – Dai is transitioning to a new stablecoin called USDS, which offers new features like the Sky Savings Rate.
- Permit Function Optimization (July 2025) – Improved approval process that lets users authorize transactions more easily and cheaply.
- Security Audits After UXLINK Hack (September 2025) – Thorough code reviews to fix vulnerabilities and strengthen security.
In-Depth Look
1. USDS Migration (September 2025)
What’s happening: MakerDAO has rebranded as Sky Protocol and introduced USDS, an upgraded stablecoin. Dai will still work alongside USDS through a 1:1 converter, so users can swap between them easily. USDS adds new perks like the Sky Savings Rate, which offers variable interest to holders, and Sky Token Rewards. You can exchange Dai for USDS on official platforms, but older Dai tokens will still work as usual.
Why it matters: This change doesn’t disrupt existing Dai users but encourages them to switch to USDS for better earning opportunities. (Source)
2. Permit Function Optimization (July 2025)
What’s happening: The permit feature in Dai’s smart contract was improved to lower transaction costs and let users approve transactions without needing to pay fees in Ethereum (ETH). This makes it easier and cheaper to use Dai in decentralized apps.
Why it matters: This upgrade makes Dai more user-friendly and accessible, encouraging more people to use it in decentralized finance (DeFi) applications. (Source)
3. Security Audits After UXLINK Hack (September 2025)
What’s happening: Following a security breach in another DeFi project (UXLINK), MakerDAO reviewed its code to fix potential weak spots, especially around wallet security and how contracts interact with each other.
Why it matters: These security improvements build trust in Dai’s decentralized system, making it safer for users and investors. (Source)
Conclusion
Dai is evolving by adding new features through the USDS migration while strengthening its security. This balance helps keep Dai stable and competitive in the growing $250 billion+ stablecoin market. It will be interesting to see how USDS adoption affects Dai’s position moving forward.