Dai Stablecoin

DAI is minted when a user locks crypto collateral—historically ETH, later a broader set of assets—into a Maker/Sky smart contract called a vault, generating DAI against that collateral. No company holds dollars in a bank account behind DAI; the system's solvency depends instead on the collateral staying worth more than the DAI issued against it. DAI launched on Ethereum in December 2017 as Single-Collateral DAI, and later expanded to Multi-Collateral DAI, with the protocol adding tokenized real-world assets to its collateral mix over time.

DAI's founding premise was that a dollar-pegged stablecoin didn't need a company custodying bank deposits to hold its peg. It could instead be backed transparently by crypto collateral locked in auditable smart contracts, with solvency enforced by code and liquidations rather than by trust in an issuer's reserves. That's the core distinction from fiat-backed stablecoins such as USDC or USDT, whose peg depends on the issuer actually holding and disclosing sufficient reserves. A decentralized design also means no single company can freeze a DAI balance at a specific address the way some centralized issuers can and have.

DAI is backed by more than a dollar of crypto collateral per token (overcollateralization)—historically ETH, now a broader mix including tokenized US Treasuries—locked in onchain vaults, rather than by cash held at a bank. It holds its ~$1 value through that collateral plus governance-set parameters.

DAI is one of the longest-running decentralized stablecoins, but it isn't risk-free. It carries collateral volatility, smart contract, governance-concentration, and real-world-asset risks. Like any stablecoin, it can briefly trade off $1 under stress.

DAI is not being discontinued—it keeps working onchain and Sky continues to support it, though some exchanges have auto-converted DAI balances to USDS, so it's being phased out on some platforms.

You can get DAI by buying, selling, or swapping it in a self-custodial wallet like MetaMask, or by generating it against collateral in a Sky vault.