What could affect the price of DAI?
DAI’s $1 peg is facing several challenges from new regulations, growing competition, and changes in decentralized finance (DeFi).
- Regulatory Pressure – New EU rules could limit DAI’s use in Europe
- Competition Among Stablecoins – Centralized coins and algorithmic stablecoins are gaining popularity
- Collateral Risks – Fluctuations in Ethereum (ETH) and shifts in real-world asset backing affect stability
- DeFi Demand – Changes in yield strategies and liquidity flows impact DAI’s use
In-Depth Look
1. Regulatory Compliance (Potential Downside)
What’s happening: The European Union’s Markets in Crypto-Assets Regulation (MiCA) restricts stablecoins that don’t meet its standards, including DAI, from being bought or traded within the European Economic Area (CoinMarketCap). For example, exchanges like Bit2Me have removed DAI in favor of MiCA-approved stablecoins.
Why it matters: Europe is a major market with around 500 million people. If DAI becomes less accessible there, demand could drop, putting pressure on its liquidity. However, MakerDAO’s decentralized governance might adapt by creating compliant versions to regain access.
2. Stablecoin Competition (Mixed Effects)
What’s happening: Centralized stablecoins like USDT and USDC control over 85% of the market. Algorithmic stablecoins such as Ethena’s USDe offer higher returns (5.5% APY compared to DAI’s 1.5% DSR). DAI’s supply has remained steady at about $5.4 billion since 2025 (Crypto.com).
Why it matters: Without improvements in yield or expanding to other blockchains, DAI risks becoming a niche product mainly used in DeFi. Its decentralized nature is a strong advantage, especially if regulators crack down on centralized stablecoins.
3. Collateral and Protocol Risks (Potential Weakness)
What’s happening: Around 38% of DAI’s backing comes from Ethereum and real-world assets (RWA) as of 2025. A sharp drop in ETH’s price (over 30%) could cause many collateralized debt positions (CDPs) to liquidate, risking DAI losing its $1 peg temporarily. Additionally, MakerDAO’s move to SubDAOs introduces new risks during governance changes.
Why it matters: Although DAI weathered the 2022-2023 market downturn, its reliance on concentrated collateral and new governance structures adds vulnerability. Keep an eye on decisions by MKR token holders regarding collateral management.
4. DeFi Liquidity Cycles (Positive Factors)
What’s happening: DAI remains a key liquidity provider in DeFi. Its 24-hour trading volume relative to market cap is 1.7%, which is higher than USDC’s 0.8%, showing active use. Recent Ethereum network milestones (U.Today) could increase demand for DAI as a trading pair.
Why it matters: Upgrades to Ethereum, like the Fusaka update, may boost DAI’s role in lending and borrowing markets, helping maintain its peg through natural demand.
Conclusion
DAI’s ability to stay stable depends on how well it adapts to regulatory changes, competes on yield, and benefits from Ethereum’s DeFi growth. While new EU rules and algorithmic stablecoins present challenges, DAI’s decentralized governance and established DeFi presence offer strength. The key questions are: Will innovations like SubDAOs and expanding to other blockchains make up for regulatory losses? Watch MKR governance decisions and DAI’s share in Ethereum’s growing transaction volume for clues.
What are people saying about DAI?
Conversations about Dai (DAI) show a mix of cautious optimism and debates about its role as a stablecoin. Here’s what’s trending:
- Positive technical signals despite some price fluctuations
- Hacker activity sparks discussions about DAI’s use in large transactions
- Strong presence in DeFi but facing growing competition from other stablecoins
Deep Dive
1. @VU_virtuals: Price expected to rise soon 🟢
"24-hour trading volume is modest compared to liquidity...social chatter links $DAI to airdrop discussions"
– @VU_virtuals (9.6K followers · Jan 3, 2026, 10:42 PM UTC)
View original post
What this means: This is a positive sign for DAI. Analysts see its large number of holders as a sign of steady demand, even though there aren’t any big updates driving the price right now. Keep an eye on DAI’s 24-hour trading volume ($90.4 million) compared to its $5.36 billion market cap to spot any changes in liquidity.
2. @Lutessia_IA: Mixed technical signals ⚠️
"Tendance baissière...très forte" (Bearish trend very strong)
– @Lutessia_IA (1.5K followers · Jan 11, 2026, 3:50 PM UTC)
View original post
What this means: The short-term outlook is neutral to slightly negative, as technical analysis shows resistance around $1.00. However, DAI’s price has stayed very stable over the past 30 days (+0.0143%), highlighting its strength as a stablecoin.
3. CoinMarketCap Community: Hacker holds $45M in DAI 🕵️
"Hacker...holds $45.36M DAI across two wallets"
– Anonymous post (July 7, 2025, 9:06 AM UTC)
View original post
What this means: This is neutral news for DAI. Large DAI holdings by hackers show it’s used in big transactions but don’t indicate any risk to its price stability. It’s important to watch these wallets for any sudden selling that could affect the market.
Conclusion
The overall view on Dai (DAI) is mixed, balancing its important role in decentralized finance (DeFi) with increasing competition from other stablecoins. While technical indicators show some short-term uncertainty, DAI’s $5.36 billion market cap and use in large transactions highlight its strong liquidity position. Keep an eye on the DAI/USDC spread—currently just 0.003%—for any signs of price instability as competition among stablecoins heats up.
What is the latest news about DAI?
Dai is facing new regulatory challenges and market competition, trying to stay stable while adapting to change. Here’s what’s happening:
- EU Exchange Restrictions (January 7, 2026) – Big crypto exchanges in Europe have stopped allowing DAI trades due to new EU rules, making it harder for Europeans to access.
- Vitalik Buterin Calls for Stablecoin Innovation (January 12, 2026) – Ethereum’s co-founder points out DAI’s shrinking market share and encourages the development of better decentralized stablecoins.
In-Depth Look
1. EU Exchange Restrictions (January 7, 2026)
What happened: The European Union introduced new rules called Markets in Crypto-Assets Regulation (MiCAR). As a result, popular exchanges like Coinbase have stopped letting users in Europe buy or trade DAI. These rules focus on tighter control over stablecoins that aren’t pegged to the euro.
What it means: This limits how easily people and institutions in Europe can use DAI, which could reduce its popularity there. However, DAI is still available for trading worldwide. Its decentralized design might attract users outside Europe who want alternatives to regulated stablecoins.
(@NaNaTheApe)
2. Vitalik Buterin Calls for Stablecoin Innovation (January 12, 2026)
What happened: Vitalik Buterin, co-founder of Ethereum, noted that DAI’s market size has dropped to $4.5 billion. He warned this could threaten Ethereum’s independence and urged the creation of more advanced decentralized stablecoins that don’t rely heavily on the U.S. dollar or vulnerable data sources (oracles).
What it means: This isn’t an immediate threat to DAI’s role in decentralized finance (DeFi), but it signals pressure to improve. New competitors like USDe offer higher returns, which might pull users away unless DAI updates its approach.
(TradingView)
Conclusion
Dai is at a turning point. European regulations are making it harder to use, and new competitors are challenging its position. Its future depends on whether its decentralized nature and connection to Ethereum can help it overcome these challenges and stay relevant in the evolving world of decentralized finance.
What is expected in the development of DAI?
Dai’s development is focused on improving governance, growing its ecosystem, and adapting to regulations.
- Endgame Phase 2 (2026) – Finalizing decentralized governance and SubDAO structures.
- RWA Collateral Expansion (2026) – Increasing the use of real-world assets to back DAI.
- Multi-Chain Integration (Ongoing) – Expanding DAI’s presence across multiple blockchain networks.
- Sky Protocol Transition (2026) – Improving interoperability and incentives between DAI and USDS.
Deep Dive
1. Endgame Phase 2 (2026)
Overview: MakerDAO’s Endgame plan aims to make its system fully decentralized and self-sustaining by 2027. Phase 2 focuses on developing SubDAOs—specialized groups responsible for managing risks, adding new collateral types, and overseeing governance.
What this means: This is positive for DAI because it reduces central control and gives the community more power in decision-making. However, if SubDAOs take longer to become effective or if disagreements arise, progress could slow down.
2. RWA Collateral Expansion (2026)
Overview: MakerDAO plans to increase the amount of real-world assets (like tokenized government bonds and credit lines) backing DAI, aiming for over 40%. They are working with institutional partners such as Monetalis and BlockTower to achieve this.
What this means: Using real-world assets can help keep DAI’s value stable during cryptocurrency market swings and generate income for the protocol. But there are risks, including regulatory challenges around asset tokenization and the possibility of partner defaults.
3. Multi-Chain Integration (Ongoing)
Overview: DAI is expanding beyond Ethereum to Layer 2 networks like Arbitrum and Optimism, and to other blockchains like Solana and Cosmos, using bridges such as Axelar.
What this means: This broader integration can increase DAI’s liquidity and usefulness across decentralized finance (DeFi) platforms, potentially driving higher demand. Keep an eye on total value locked (TVL) on these chains and how cross-chain fees evolve.
4. Sky Protocol Transition (2026)
Overview: After rebranding, USDS has become the dominant stablecoin in Maker’s ecosystem, but DAI remains active. The plan focuses on smooth conversions between DAI and USDS and encourages users to migrate by adjusting incentives like the Sky Savings Rate (SSR).
What this means: In the short term, this creates some uncertainty for DAI due to potential liquidity splits. Long-term success depends on maintaining trust in DAI while encouraging users to adopt USDS features.
Conclusion
Dai’s roadmap aims to balance decentralization, growth through real-world assets, and cross-chain expansion. However, it faces challenges from regulatory uncertainty and competition from other stablecoins. The big question is whether SubDAOs and real-world assets will strengthen DAI’s role in traditional finance or if USDS’s rebranding will overshadow DAI’s legacy.
What updates are there in the DAI code base?
Dai's technology was updated with the Sky Protocol upgrade, which introduced a new stablecoin.
- Sky Protocol Launch (September 2025) – Dai was converted 1:1 into a new stablecoin called USDS, improving how the system is managed.
Deep Dive
1. Sky Protocol Launch (September 2025)
Overview:
MakerDAO, the organization behind Dai, changed its name to Sky Protocol. They upgraded Dai to a new stablecoin called USDS by moving users’ balances through smart contracts at a 1:1 ratio. This upgrade added new features for managing the system, like earning rewards for staking and allowing voting through SKY tokens.
What this means:
This change doesn’t affect how the stablecoin works day-to-day. It’s mainly a rebranding and technical update. Users holding Dai can easily convert it to USDS without any loss, so everything continues smoothly.
(Source)
Conclusion
The move to Sky Protocol focuses on making governance easier to scale, while keeping the stablecoin’s core goal of stability intact. It will be interesting to see how these new governance features influence Dai’s role in decentralized finance (DeFi) over time.