What could affect the price of DAI?
DAI’s stability is being challenged by competition for better yields, new regulations, and risks tied to its backing assets.
- Yield Competition – Ethena’s USDe stablecoin ($12.26B market cap) attracts users with yields over 5.5%, compared to DAI’s 1.5% Dai Savings Rate (DSR).
- Regulatory Changes – The U.S. GENIUS Act bans interest on stablecoins, while Hong Kong requires full identity verification (KYC) for certain stablecoins.
- Backing Asset Risks – About 65% of DAI’s collateral is in ETH and USDC; big drops in crypto prices could threaten its stability.
In-Depth Look
1. Yield Competition from Synthetic Stablecoins (Negative Impact)
Ethena’s USDe has become the third-largest stablecoin by offering high yields (5.5%+) through complex trading strategies that reduce risk. In contrast, DAI’s savings rate is much lower at 1.5%, following a governance decision in October 2025. Some platforms like Coinbase and PayPal are offering new “reward” programs that get around the U.S. ban on interest-bearing stablecoins.
What this means: DAI could lose users if it can’t offer competitive returns. However, its decentralized control and strong collateral backing might still attract users who prefer less risk, especially during market downturns.
2. Navigating New Regulations (Mixed Impact)
The U.S. GENIUS Act, passed in June 2025, requires stablecoin issuers to keep full reserves in cash or government bonds and bans paying interest on stablecoins. DAI’s decentralized structure helps it avoid direct regulation, but since 23% of its collateral is USDC (a regulated stablecoin), it’s indirectly affected. Meanwhile, Hong Kong’s new rules require real-name verification for stablecoins pegged to HKD and RMB, which could limit privacy-focused uses of DAI.
What this means: DAI’s partly decentralized setup could become a problem if regulators focus on its centralized collateral or enforce strict identity checks on users.
3. Risks from ETH and USDC Collateral (Potential Threat)
DAI’s collateral is about 42% ETH and 23% USDC. A sharp drop in ETH’s price—like the 22% fall in March 2025 that caused $47 million in DAI redemptions—could force forced sales of collateral, putting pressure on DAI’s stability. If USDC loses its peg to the dollar, as it did briefly in March 2023, risks increase further.
What this means: Although DAI has survived past shocks, relying heavily on a few assets increases risk. The upcoming Sky Protocol plans to diversify collateral with real-world assets like government bonds and corporate debt by late 2026, which could help reduce these risks.
Conclusion
DAI’s ability to maintain price stability depends on balancing competitive yields, adapting to new regulations, and managing collateral risks. Its decentralized nature is a strong advantage, but growing competition from synthetic stablecoins and tighter regulations on financial activities outside traditional banks present serious challenges. Keep an eye on the Sky Protocol’s progress with real-world asset adoption and USDC’s reserve transparency to see if DAI’s decentralized governance can keep pace with centralized competitors.
What are people saying about DAI?
DAI is at the center of a debate between supporters of decentralized finance (DeFi) and concerns over suspicious transactions. Here’s what’s trending:
- Stablecoin competition – DAI is compared to USDe and USDD, sparking discussions about returns and risks.
- Hacker activity – Over $45 million in DAI held in wallets linked to a Coinbase hack raises concerns.
- MakerDAO’s rebranding – The shift to Sky Protocol creates uncertainty about DAI’s future.
Deep Dive
1. @0xMoon6626: DAI’s stability vs. competitors is mixed
“DAI offers a 3.24% yield on AAVE, which is lower than USDe’s 9% and USDD’s 6-10%. Its overcollateralization helps protect it from losing its peg, but a drop in ETH prices could cause liquidations.”
– @0xMoon6626 (1.2k followers · 12k impressions · Aug 30, 2025)
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What this means: This is a neutral outlook for DAI. Its decentralized design and risk controls are strong points, but lower yields and the risk tied to collateral (like ETH) keep it in a competitive spot.
2. CoinMarketCap Community: $45M DAI in hacker wallets is a red flag
“A hacker exploited Coinbase, swapping $12.5 million DAI for ETH at $2,569, and currently holds $45.36 million DAI across two wallets, possibly planning future ETH purchases.”
– @CoinMarketCap (Community post · Jul 7, 2025)
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What this means: This is bearish for DAI. Large amounts of DAI in hacker-controlled wallets could lead to increased regulatory attention. However, it also shows that DAI is liquid enough for big transactions.
3. @BitverseApp: Sky Protocol rebrand causes mixed reactions
“MakerDAO’s rebranding to Sky Protocol introduces USDS as an upgrade to DAI, but the original DAI is still in use. Traders are debating if USDS will reduce demand for DAI.”
– @BitverseApp (8.5k followers · 23k impressions · Sep 5, 2025)
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What this means: Mixed signals for DAI. The move to USDS could split liquidity, but since USDS can be converted 1:1 with DAI, its usefulness might stay intact if adoption grows.
Conclusion
The outlook for DAI is mixed. It remains a key decentralized stablecoin but faces challenges from competing stablecoins offering higher yields, concerns about hacker-related activity, and changes from MakerDAO’s rebranding. Keep an eye on DAI’s circulating supply (5.36 billion as of October 2025) for changes linked to USDS adoption or regulatory actions against hacker wallets.
What is the latest news about DAI?
Dai is navigating a changing stablecoin market, facing increased regulatory scrutiny and growing competition. Here are the key updates:
- USDe Surpasses Dai in Market Cap (October 24, 2025) – Ethena’s USDe moves into third place, pushing Dai to fourth.
- Stricter Stablecoin Regulations (October 27, 2025) – New laws in the U.S. and Hong Kong affect how Dai complies with rules.
- Competition for Higher Yields (October 14, 2025) – Dai’s 1.5% savings rate trails behind competitors like USDe.
In-Depth Look
1. USDe Surpasses Dai in Market Cap (October 24, 2025)
What happened:
Ethena’s USDe stablecoin overtook Dai’s market value in late 2024 and became the third-largest stablecoin by mid-2025, reaching $12.26 billion. Unlike Dai, which is backed by more collateral than its value (overcollateralized), USDe uses a synthetic strategy involving crypto assets and futures contracts to balance risk.
Why it matters:
This change shows that investors are looking for stablecoins with higher returns. Dai is known for being decentralized, which is a big plus, but USDe offers an average yield of 10.86%, much higher than Dai’s 1.5%. However, USDe’s model isn’t without risks — it experienced a sudden drop on October 10, 2025, briefly falling below its $1 peg to $0.9912.
(Source: Santiment)
2. Stricter Stablecoin Regulations (October 27, 2025)
What happened:
The U.S. passed the Stablecoin Act (GENIUS Act), which bans stablecoins that pay interest. As a result, projects like Sky’s USDS now offer “rewards” instead of interest. Meanwhile, Hong Kong introduced the Stablecoin Ordinance, requiring full identity checks (KYC) on the blockchain, making it harder for Dai to be used across borders.
Why it matters:
Dai’s decentralized design helps it avoid some issues with interest payments, but it now faces pressure to add compliance features like zero-knowledge proofs (ZKPs) to meet institutional standards. MakerDAO, the group behind Dai, will need to find a balance between protecting user privacy and following new regulations.
(Source: Gate.com)
3. Competition for Higher Yields (October 14, 2025)
What happened:
Dai’s Savings Rate (DSR) remains at 1.5%, which is much lower than USDe’s 5.5% and Sky’s USDS at 4.5%. During the market downturn in October 2025, Dai briefly rose above $1 to $1.0015 but recovered faster than more volatile assets.
Why it matters:
Dai’s stability is attractive to users who want less risk, but its lower returns could cause some investors to move to other stablecoins offering better yields. MakerDAO’s plan to rebrand as Sky Protocol and integrate USDS might help update incentives without losing the decentralized nature of Dai.
(Source: Yahoo Finance)
Conclusion
Dai is facing challenges from synthetic stablecoins that are taking market share and from new regulations that require technical upgrades. Its ability to stay stable during market swings keeps it a trusted decentralized option, but improving yields will be key to staying competitive. The big question is whether MakerDAO’s shift toward USDS and compliance technology will attract new investors or if Dai will continue to rely on its decentralized community to shape its future.
What is expected in the development of DAI?
Dai’s roadmap focuses on improving governance, growing its ecosystem, and adapting to new regulations.
- Governance Module V2 (Q4 2025) – Making voting easier and more fair.
- FRAX Integration (2025-2026) – Sharing liquidity and expanding collateral options.
- sUSDS Expansion (Ongoing) – Offering yield products aimed at institutions.
- MiCA Compliance (Q1 2026) – Meeting new EU stablecoin rules.
In-Depth Look
1. Governance Module V2 (Q4 2025)
Overview:
The updated governance system will introduce delegated voting and a quadratic voting method. This means smaller holders of MKR (now SKY) can have a bigger say, helping to reduce past issues with decision-making being too centralized (Blockworks).
What this means:
This is positive for Dai and USDS adoption because better governance can attract institutional investors. However, there’s a risk that important decisions might take longer to approve due to more complex voting.
2. FRAX Integration (2025-2026)
Overview:
MakerDAO plans to integrate with the Frax Protocol, allowing shared liquidity pools and using Frax bonds (FXBs) as collateral to mint Dai (CMC Community Post).
What this means:
This move could strengthen Dai by diversifying its collateral, which is good. But it also means Dai’s stability will partly depend on how stable Frax remains. If FXB prices fluctuate a lot, it could affect Dai’s value.
3. sUSDS Expansion (Ongoing)
Overview:
The rebranded USDS (formerly DAI) is focusing on sUSDS, a savings token offering about 4.75% annual yield, targeting institutional investors. Recent updates include special wallet access for large holders and tools for managing treasury funds (The Defiant).
What this means:
If more institutions adopt sUSDS, liquidity could increase, which is good. But competition from other stablecoins like Tether’s USDT or Ethena’s USDe offering similar yields could limit growth.
4. MiCA Compliance (Q1 2026)
Overview:
To comply with the EU’s Markets in Crypto-Assets Regulation (MiCA), MakerDAO will require identity verification (KYC) for wallets holding over €1 million in USDS and will move reserves to EU-regulated entities (Bit2Me).
What this means:
This could cause some short-term inconvenience for users, possibly reducing activity on decentralized exchanges. But in the long run, it opens the door for USDS to operate fully within the EU market, which is a big positive.
Conclusion
Dai’s transition to USDS shows a clear shift toward serving institutional investors and meeting regulatory demands, while still trying to keep its decentralized roots. Key developments like integrating with FRAX and improving governance could reshape its position in the $316 billion stablecoin market. The big question is whether USDS’s focus on yield and compliance will help it compete with centralized stablecoins without losing its decentralized identity.
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. In the meantime, please feel free to choose another question or cryptocurrency for analysis.