Dai (DAI) is the largest decentralized stablecoin, issued by the MakerDAO protocol. Unlike fiat- backed stablecoins, DAI is collateral-backed — historically by ETH and other crypto assets, increasingly by US Treasuries via the protocol’s real-world-asset facilities. DAI’s peg is maintained by on-chain arbitrage incentives rather than direct redemption at $1.
Mechanism and reserves
DAI is minted when users lock collateral in MakerDAO vaults at an over-collateralization ratio (typically ~150% for crypto collateral). The protocol’s Stability Fee, Dai Savings Rate, and emergency shutdown mechanisms maintain the peg. Over the past two years, a growing share of DAI backing has shifted to short-duration US Treasury bills held through MIP65-style RWA vaults.
Peg history
DAI’s peg has been historically resilient. Notable episodes include the March 2020 “Black Thursday” ETH crash when auction failures caused brief shortages, and the March 2023 USDC depeg which pulled DAI down sympathetically because USDC was a meaningful share of DAI collateral at the time. Both events resolved quickly.
Governance
MakerDAO governance has been the subject of significant restructuring under the Endgame plan, including spin-off “SubDAOs”, the launch of upgraded tokens (USDS / Sky), and changes to the savings- rate mechanism. These governance debates regularly surface in DAI social discussion.
How to use the confidence chart
DAI’s confidence baseline is generally calm but more reactive than USDC’s — collateral-mix news and governance debates produce sentiment swings that don’t always reflect underlying peg risk. Research only — not a solvency rating.