Dai

Dai (DAI) is a decentralized stablecoin created by MakerDAO and designed to hold a value close to one US dollar. Unlike stablecoins backed by dollars in a bank account, Dai is generated against on-chain collateral, making it one of DeFi's foundational dollar-pegged assets.

What is Dai?

Dai is the multi-collateral stablecoin (MCD) issued through the MakerDAO protocol on Ethereum. Its purpose is to give users a stable unit of account for trading, lending, saving, and payments without relying on a centralized issuer holding fiat reserves. Because it lives entirely on-chain, DAI is composable across the wider DeFi ecosystem.

How does Dai work?

Dai is minted when users lock crypto collateral into Maker vaults and borrow DAI against it. The system is overcollateralized, meaning the value deposited exceeds the DAI issued, providing a buffer against price swings. If collateral falls too low in value, positions can be liquidated automatically to keep the system solvent. Stability mechanisms and interest-rate parameters, governed by the protocol, nudge DAI back toward its dollar target when it drifts.

Multi-collateral backing

As multi-collateral Dai, the token can be backed by a diversified basket of crypto and, over time, other approved assets, which reduces reliance on any single collateral type and strengthens the peg's resilience.

Dai tokenomics and supply

DAI has no fixed maximum supply. Instead, the amount in circulation, currently around 4.63 billion, expands and contracts with demand: it grows when users mint new Dai and shrinks when they repay loans and burn it. This elastic, demand-driven issuance is what lets DAI track the dollar. Its price history stays tight around the peg, ranging from an all-time low near $0.88 to a high of $1.22, with deviations usually short-lived.

What is Dai used for?

• A dollar-pegged unit for trading and hedging volatility
• Collateral and liquidity across DeFi lending and yield protocols
• Payments and remittances without a centralized issuer
• Saving in a stable asset while staying fully on-chain

Where to buy Dai (DAI)

DAI is available on virtually all major exchanges and decentralized platforms. Consult our best crypto exchanges ranking to find a venue with deep DAI liquidity, and use our best crypto wallets guide to choose a wallet that supports ERC-20 tokens for self-custody.

Is Dai a good investment?

As a stablecoin, DAI is not designed to appreciate; its value is meant to stay near one dollar, so it functions as a savings and settlement tool rather than a growth asset. The main risks are technical and systemic: smart contract vulnerabilities, collateral shocks, and governance decisions could pressure the peg. This is not financial advice, but understanding how DAI maintains stability is essential before relying on it.