DAI Stablecoin: How Sky's Dollar Holds Its Peg
DAI is backed by a mix of overcollateralized crypto loans, other stablecoins held in a Peg Stability Module, and real-world assets. Native DAI lives only on Ethereum, and Sky's newer USDS and sUSDS now outweigh it.
DAI is a dollar stablecoin issued by the Sky protocol, formerly MakerDAO, and backed by a mix of overcollateralized crypto loans, other stablecoins held in a Peg Stability Module, and real-world assets such as short-term government debt. According to Allium's dataset, native DAI has $3.24B of free-floating supply, all of it on Ethereum, while Sky's newer tokens USDS and sUSDS together hold $5.88B (Allium data, November 3, 2026).
Key takeaways
- DAI's backing has three parts: crypto collateral in vaults, stablecoins in the Peg Stability Module, and real-world assets. The mix changes with governance decisions.
- Because the Peg Stability Module holds other stablecoins, mainly USDC, part of DAI's backing depends indirectly on those issuers and their banks.
- Liquidation is a process with delays and auctions, not an instant event at a precise price.
- Native DAI lives only on Ethereum. A further $0.48B of bridged DAI is spread across 12 other chains, and sUSDS ($4.56B) is now larger than DAI itself.
The three things that back DAI
| Source of backing | How it works | What it depends on |
|---|---|---|
| Vault collateral | Users lock crypto such as ETH and mint DAI against it, up to a limit set per collateral type | Collateral prices, oracles, and liquidations working under stress |
| Peg Stability Module | Holds other stablecoins and swaps them for DAI at a fixed rate, which pulls DAI back toward $1 | The stablecoins it holds, mainly USDC, and their issuers |
| Real-world assets | The protocol allocates part of its balance sheet to short-term government debt and similar assets through arrangements with third parties | Those counterparties and the legal structures that hold the assets |
The shares move over time as Sky governance changes parameters, so check the protocol's own dashboards for the current composition. The point for a holder is that DAI is no longer purely crypto-backed: its stability rests on smart contracts, on centralized stablecoins, and on off-chain assets at the same time.
How a vault gets liquidated
When a user mints DAI against collateral, the vault must stay above a minimum collateralization ratio. If prices fall far enough, the vault becomes eligible for liquidation. Three things make that a process rather than a switch:
- Delayed prices. Collateral prices reach the protocol through oracles, and the Oracle Security Module applies a one-hour delay before a new price takes effect, which gives vault owners time to add collateral.
- Keepers. Independent operators trigger liquidations of eligible vaults. The protocol does not act on its own.
- Auctions. Seized collateral is sold in auctions to cover the debt plus a penalty. In a fast crash, auctions can clear at poor prices: in March 2020 some cleared at near-zero bids and left the protocol with bad debt.
A worked example with a 150% minimum:
| Step | Collateral value | DAI owed | Ratio | Status |
|---|---|---|---|---|
| Deposit $1,500 of ETH, mint 1,000 DAI | $1,500 | 1,000 | 150% | At the limit |
| ETH rises 20% | $1,800 | 1,000 | 180% | Safe |
| ETH falls 10% from deposit | $1,350 | 1,000 | 135% | Eligible for liquidation once the delayed price updates |
| Safer sizing: mint 600 DAI instead | $1,350 | 600 | 225% | Safe |
Illustrative ratio. Sky sets the minimum per collateral type.
DAI, USDS and sUSDS
When MakerDAO became Sky in 2024, it launched USDS as the upgraded stablecoin and sUSDS as the token that earns the Sky Savings Rate. DAI remains in circulation and converts to USDS one for one.
| Token | Adjusted supply | Chains | What it is |
|---|---|---|---|
| sUSDS | $4.56B | 4 | Savings token of USDS, price rises with accrued yield |
| DAI (native) | $3.24B | 1 | The original stablecoin, on Ethereum |
| USDS (native) | $1.32B | 2 | Sky's upgraded stablecoin |
| DAI (bridged) | $0.48B | 12 | DAI locked on Ethereum and represented elsewhere |
Allium data, November 3, 2026. sUSDS is priced around $1.11 because it accrues yield, which is by design and not a depeg.
Any answer to "how big is DAI?" depends on which tokens it includes. For the USDS side, see what USDS is.
What the supply figures include
Allium's adjusted circulating supply starts from total supply and removes issuer reserves, bridge escrows, protocol collateral, savings vaults and frozen addresses. It is Allium's estimate of the supply that is actually free-floating, and it is the figure used throughout this article. For DAI that matters twice over. DAI deposited into savings contracts or locked as collateral inside other protocols is excluded, so $3.24B is the DAI that is actually circulating. And native DAI is minted only on Ethereum, so the DAI on 12 other chains is bridged: the original is held in a bridge escrow on Ethereum, which the adjustment removes, so the same dollars are not counted twice.
Making those exclusions requires each deployment to carry an issuer, contract, native or bridged flag and price on the same date. Allium's stablecoin datasets carry those fields across 150+ chains, which is how $0.48B of bridged DAI is identified apart from the $3.24B minted natively. The same distinction matters under stress: a depeg in one chain's bridged DAI can reflect a bridge problem rather than a problem with DAI.
Frequently asked questions
Who issues DAI?
DAI is created by the Sky protocol, formerly MakerDAO. It is minted against collateral in vaults and through the Peg Stability Module, under rules set by Sky governance.
Is DAI backed by USDC?
Partly. The Peg Stability Module holds other stablecoins, mainly USDC, alongside crypto collateral and real-world assets. The share changes over time.
Is DAI the same as USDS?
No. USDS is Sky's upgraded stablecoin, launched in 2024. DAI remains in circulation and converts to USDS one for one.
How much DAI exists?
Allium's data shows $3.24B of free-floating native DAI on Ethereum and $0.48B of bridged DAI on 12 other chains on November 3, 2026.
Why does sUSDS trade above $1?
sUSDS accrues the Sky Savings Rate, so each token is worth more USDS over time. Allium priced it around $1.11 on November 3, 2026.
See the data behind this post. Browse the stablecoin tables, or read How to Monitor Stablecoin Balances Across Chains for how the records are put together.
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Allium provides onchain data infrastructure. Companies named in this article may be Allium customers, prospects or commercial counterparties. The authors and other Allium personnel may hold positions in the assets discussed. This article is informational only and is not investment, legal or tax advice. Data and information last reviewed: November 4, 2026.
