What could affect the price of DAI?
DAI’s stability is being tested by new regulations and increasing competition. Its decentralized design is both a strength and a potential weakness.
- Regulatory Challenges – New EU rules limit DAI’s availability in Europe, which could reduce how much people use it.
- Competition – Centralized stablecoins like USDT and USDC dominate the market, causing DAI’s market value to drop to $4.5 billion.
- Protocol Changes – MakerDAO is rebranding to Sky Protocol and moving from DAI to USDS, which could shake things up if users don’t adopt the changes quickly.
Deep Dive
1. Regulatory Pressure (Negative Impact)
What’s happening: The European Union’s Markets in Crypto-Assets Regulation (MiCA) has led many exchanges to stop offering DAI in the European Economic Area. This means over 450 million people in that region have less access to DAI, which could lower demand. In the U.S., the proposed GENIUS Stablecoin Act might require stablecoins like DAI to hold certain reserves and get licenses, which challenges DAI’s decentralized approach.
Why it matters: When access is limited in big markets, DAI could lose liquidity (how easily it can be bought or sold), increasing the risk that its value might stray from $1 during market ups and downs. Past examples, like the collapse of Terra, show that regulatory changes can cause investors to quickly move away from stablecoins that don’t comply.
2. Market Competition (Mixed Impact)
What’s happening: Centralized stablecoins such as Tether (USDT) and USD Coin (USDC) control about 83% of the stablecoin market, with market caps of $186 billion and $74 billion respectively. Meanwhile, DAI’s market cap has fallen to $4.5 billion. Ethereum co-founder Vitalik Buterin points out that decentralized stablecoins like DAI face challenges because they rely on the U.S. dollar peg and compete with staking rewards offered by centralized coins. However, DAI’s system requires more collateral (for example, 150% backed by Ethereum), which offers greater transparency and security.
Why it matters: DAI appeals to users who value censorship resistance and decentralization, especially in decentralized finance (DeFi). But if it can’t compete with the convenience and rewards of centralized stablecoins, its growth and demand may remain limited.
3. MakerDAO Upgrades (Positive Impact)
What’s happening: MakerDAO is rebranding as Sky Protocol and plans to transition from DAI to a new stablecoin called USDS. This upgrade includes creating smaller, specialized groups called SubDAOs or “Stars” to handle different use cases and improve how users earn yields. If done well, these changes could attract more institutional investors.
Why it matters: Improved governance and new features like the Sky Savings Rate could increase demand by offering better returns or stability. However, the transition is complex and could cause temporary disruptions in DAI’s price if users don’t adopt the new system quickly.
Conclusion
DAI’s ability to maintain its $1 value depends on navigating regulatory hurdles, standing out in a crowded market, and successfully upgrading its protocol. Keep an eye on DAI supply changes on Ethereum and Polygon networks, as well as how quickly Sky Protocol gains users. The big question for 2026: Can DAI’s decentralized principles overcome regulatory challenges?
What are people saying about DAI?
DAI conversations are buzzing with talks about possible airdrops and big whale moves. Here’s what’s trending:
- Airdrop rumors are driving positive sentiment even though there’s little new protocol news
- Technical signals are mixed: short-term price pressure versus long-term stability
- A $45 million hacker-held DAI stash raises concerns about DAI’s involvement in large transactions
Deep Dive
1. @VU_virtuals: Airdrop Excitement Meets Stablecoin Basics bullish
"Social chatter links $DAI to airdrop discussions... fundamentals remain steady"
– Velvet Unicorn (9,635 followers · Jan 3, 2026, 10:42 PM UTC)
View original post
What this means: This is positive for DAI because talk of airdrops can temporarily increase demand. However, since there are no major updates to the protocol itself, the optimism mainly comes from DAI’s role as a reliable stablecoin rather than new features from MakerDAO.
2. @Lutessia_IA: Conflicting Technical Signals mixed
"La tendance baissière est actuellement très forte... tendance de fond est faiblement haussière" (Strong short-term downtrend vs. weak long-term uptrend)
– Lutessia IA (1,509 followers · Jan 11, 2026, 3:50 PM UTC)
View original post
What this means: These mixed signals highlight DAI’s unique position as a stablecoin. While price charts show some short-term weakness, the long-term trend remains slightly positive. Traders might see some small price swings around the $1 peg, but the main focus is on maintaining that peg.
3. CoinMarketCap Post: Hacker’s $45M DAI Holding bearish
"He still holds $45.36M in DAI... likely to continue buying ETH"
– Community post (July 7, 2025, 8:52 AM UTC)
What this means: This raises concerns about DAI’s reputation since large amounts held by hackers could attract regulatory attention. However, given DAI’s total circulating supply of $5.36 billion, the overall market impact is limited for now.
Conclusion
The outlook for DAI is mixed. Its core stability features keep it strong, but external factors like hacker activity and technical fluctuations add some pressure. Upgrades like Endgame and the Spark Protocol’s move to reduce centralized collateral (as noted by Velvet Unicorn) improve the fundamentals. Keep an eye on DAI’s collateralization ratio this week — if it falls below 150%, it could signal stress in MakerDAO’s vault system.
What is the latest news about DAI?
Dai faces important challenges and new opportunities as Ethereum co-founder Vitalik Buterin points out risks, while stablecoin payment cards are gaining popularity.
- Vitalik Highlights DAI’s Structural Risks (January 12, 2026) – Buterin warns that for decentralized stablecoins like DAI to succeed, Ethereum must solve issues related to price oracles, staking rewards, and maintaining the dollar peg.
- Stablecoin Cards Poised for Growth in 2026 (January 10, 2026) – Dragonfly Capital predicts rapid growth in crypto payment cards, with DAI playing a key role in connecting traditional finance and digital currencies.
Deep Dive
1. Vitalik Highlights DAI’s Structural Risks (January 12, 2026)
Overview: Vitalik Buterin, co-founder of Ethereum, pointed out three major challenges for decentralized stablecoins such as DAI. First, because DAI is tied to the U.S. dollar, it is exposed to geopolitical risks. Second, the price data it relies on (called oracles) can be vulnerable to manipulation. Third, the rewards from staking compete with how efficiently DAI uses its collateral. Currently, DAI’s market value has dropped to $4.5 billion, while centralized stablecoins like USDT dominate with $186.8 billion. Buterin suggests redesigning DAI’s system to avoid failures like the Terra collapse.
What this means: These challenges are significant for DAI’s future, highlighting weaknesses in its current design. However, it also shows that DAI remains Ethereum’s top decentralized stablecoin and needs innovation to stay competitive.
(TradingView)
2. Stablecoin Cards Poised for Growth in 2026 (January 10, 2026)
Overview: Haseeb Qureshi from Dragonfly Capital predicts that stablecoin payment cards will see huge growth in 2026. These cards allow users to spend dollars globally through Visa and Mastercard networks using stablecoins like DAI. DAI is already part of popular cards from Crypto.com, Binance, and Wirex, offering benefits like protection against inflation and easier cross-border payments—especially in developing countries. In 2024, stablecoin transactions reached $11 trillion, with card usage growing 300% year-over-year.
What this means: This trend is positive for DAI as it expands from decentralized finance (DeFi) into everyday payments, which could boost its use and demand. However, clear regulations will be important for continued growth.
(CoinMarketCap)
Conclusion
DAI faces key challenges in maintaining decentralization but is gaining real-world use through payment cards. The question remains whether DAI’s community-driven improvements can overcome these risks and take advantage of the growing stablecoin market in 2026.
What is expected in the development of DAI?
Dai’s roadmap is focused on improving governance and growing its ecosystem.
- SubDAO Expansion (2026) – Creating smaller, specialized groups called SubDAOs to manage different parts of the system.
- Real-World Asset Integration (Q2 2026) – Adding more types of real-world assets, like bonds, as collateral to back Dai.
- Enhanced Stability Mechanisms (Ongoing) – Making Dai’s price more stable, especially during market ups and downs.
Deep Dive
1. SubDAO Expansion (2026)
Overview: MakerDAO’s Endgame roadmap plans to introduce SubDAOs, which are smaller teams focused on specific tasks like managing risk or real-world assets. This setup aims to make decision-making faster and attract bigger investors.
What this means: This is good news for Dai’s decentralization and growth because it can make governance more efficient. However, coordinating between these groups could be challenging.
2. Real-World Asset Integration (Q2 2026)
Overview: MakerDAO wants to increase the use of real-world assets (RWAs) such as government bonds and institutional loans as collateral for Dai. Currently, RWAs back about 35% of Dai’s supply (S&P Global, 2025).
What this means: This could make Dai more stable since it’s backed by real assets, but it also means dealing with more regulations. The key will be keeping enough collateral to protect Dai during tough market times.
3. Enhanced Stability Mechanisms (Ongoing)
Overview: Because markets can be unpredictable, MakerDAO is working on improving how Dai maintains its $1 peg. This includes adjusting fees dynamically and improving data sources (oracles) that inform the system (Maker Forum, 2025).
What this means: If done well, these improvements could help Dai compete better with other stablecoins like USDC. But making the system too complex could cause new problems.
Conclusion
Dai’s success in 2026 depends on balancing decentralized governance through SubDAOs with expanding real-world asset backing, all while keeping its price stable. The big questions are whether Dai can grow its real-world assets without running into regulatory issues and if SubDAOs can work smoothly together as the system becomes more complex.
What updates are there in the DAI code base?
Dai’s main code remains stable with no major recent changes, but its surrounding ecosystem keeps growing and improving.
- Unlimited Approval Feature (2017) – Lets users give other addresses ongoing access to their DAI balances.
- Permit Function (2017) – Allows approvals without paying transaction fees by using digital signatures.
- TransferFrom Aliases (2017) – Simplifies moving tokens with easy-to-use functions like "push," "pull," and "move."
Deep Dive
1. Unlimited Approval Feature (2017)
Overview: Dai’s smart contract lets users approve other addresses to spend unlimited amounts of their DAI. This comes from the standard design of many tokens but can be risky if users approve untrustworthy contracts.
The system allows approvals up to the largest possible number (uint256 max), meaning access stays open until the user cancels it. While this makes repeated transactions easier, it also increases the chance of scams if users aren’t careful.
What this means: This feature is a trade-off—offering convenience but requiring users to be cautious when granting permissions to others.
(Source)
2. Permit Function (2017)
Overview: The permit function lets users approve DAI transfers without paying gas fees (transaction costs) by signing a message off the blockchain. Another party can then submit this signed approval on-chain.
This is especially helpful for decentralized apps (dApps) where users might not have Ethereum (ETH) to pay fees. The signed message includes details like a unique number (nonce) to prevent replaying the same approval multiple times.
What this means: This improves DAI’s usability, making it easier for people without ETH to interact with DeFi apps and broadening access.
(Source)
3. TransferFrom Aliases (2017)
Overview: Dai’s contract adds simpler versions of the standard transferFrom function, called push, pull, and move. These make it easier for developers to write code that moves tokens between accounts.
For example, push(user, amount) does the same thing as transferFrom(msg.sender, user, amount), reducing complexity and making smart contract interactions more straightforward.
What this means: This helps developers work more efficiently but doesn’t change how users experience DAI or affect the market.
(Source)
Conclusion
Dai’s code focuses on flexibility and working well with other DeFi projects. While the core code hasn’t changed much since 2017, this stability is a strength. However, it also raises questions about how well DAI can adapt to new DeFi trends. The upcoming "Endgame" upgrades from MakerDAO could bring important changes to DAI’s technical setup and future capabilities.