Dai

What it is

Dai is a stablecoin, a token designed to stay worth one US dollar, with a difference: no company holds dollars in a bank to back it. Instead it is issued by software, the Maker protocol, created by MakerDAO, the project Rune Christensen founded and which launched Dai on Ethereum in December 2017. The memorable fact: Dai is the oldest decentralised stablecoin still operating at scale, having held close to its peg through several market collapses that destroyed rival designs.

How it works

Dai is created when users lock collateral, mostly crypto assets, into vaults and borrow new Dai against it. The system is overcollateralised: the locked assets must be worth comfortably more than the Dai created, and if the collateral’s value falls too far the vault is automatically liquidated, sold off to cover the debt. Borrowers pay a stability fee, an interest rate that governance adjusts to nudge the price back towards a dollar. Over time the collateral mix has broadened to include other stablecoins and tokenised real-world assets, conventional instruments such as bonds represented on-chain. Supply is uncapped and simply tracks demand for these loans. According to figures published on sky.money, the combined supply of Dai and its successor token USDS stood near 9.9 billion in July 2026, backed by collateral worth about $13.9 billion.

The story so far

Dai began as a single-collateral system backed only by ether, then relaunched as multi-collateral Dai in November 2019. The March 2020 crash, known in the community as Black Thursday, forced emergency changes after collapsing prices left some vaults under water. Later years brought a slower-burning controversy: heavy reliance on centralised stablecoins and real-world assets as collateral, which critics argued diluted the decentralisation that was the point. In 2024 MakerDAO rebranded as Sky and introduced USDS, a sibling stablecoin that Dai can be upgraded into one for one. After community pushback, Dai itself was retained, and as of July 2026 both circulate side by side.

Where it stands

As of late July 2026, CoinGecko places Dai at about 21st or 22nd among crypto assets, roughly level with Canton, with about $4.7 billion of Dai in circulation trading within a whisker of $1.00. What to watch next: how Sky balances Dai against USDS, whether the collateral mix shifts back towards decentralised assets or further into tokenised Treasuries, and how new stablecoin laws in the US and Europe treat a token with no single issuer to license. Dai’s endurance is its argument. Every year it holds the peg without a company behind it is evidence that the original idea still works, and as of July 2026 the peg is holding.