DAICrypto-backedRank #4
Multi-Collateral Dai
Sky Protocol (formerly MakerDAO)
Market cap (static): ~$5.4B
Overview
Original decentralized stablecoin, live since December 2017. Users open Vaults and over-collateralize crypto to mint DAI. MakerDAO rebranded to Sky Protocol in 2024 and launched USDS as a successor — DAI and USDS are freely interchangeable 1:1. Fully on-chain governance by SKY token holders.
Features
Engineering-oriented breakdown of capabilities: standards, who they matter for, integration rationale, per-feature risks, and vetted external references (specs, docs, verified source).
Protocol repo: github.com/makerdaoPrimary Ethereum verified source: Etherscan
| Feature | Standards | Audience | Why it matters | Risk / caveat | References |
|---|---|---|---|---|---|
Multi-collateral vaults stability | — | Both | DAI is minted from Maker/Sky vaults — integrations with leverage need to understand collateral types and liquidation math. | Collateral parameters change via governance; assumptions decay without monitoring. | |
DAI Savings Rate — DSR yield |
| User | Protocol-native yield for holding DAI — integrate Pot contract or Spark interfaces depending on deployment. | DSR rate changes with governance; not a fixed yield product. | |
Liquidation auctions — Dog/Clip stability | — | Both | Undercollateralized vaults liquidate via auction — relevant for keepers and risk dashboards, not typical transfers. | Oracle or market shocks can cascade liquidations; MEV and gas spikes affect execution. | |
On-chain governance via SKY governance | — | Both | Protocol risk parameters are voted on-chain — long-lived integrations should track spells and executive votes. | Governance attacks or voter apathy can change collateral and oracle behavior. | |
Peg Stability Module — PSM stability | — | Both | PSM enables near-par swaps with whitelisted stablecoins — primary on-chain peg arbitrage lever for integrators. | Inventory and fee parameters change; USDC PSM exposure links to Circle risk indirectly. | |
Real-world asset integration stability | — | Corporate | RWA collateral introduces off-chain legal and reporting dependencies beyond pure crypto price feeds. | RWA counterparty and legal structure risk; oracle latency vs off-chain marks. | |
Decentralised oracle — Medianizer stability | — | Both | Prices feed liquidations — integrations relying on DAI price should understand oracle sources and delays. | Oracle manipulation or STETH-style feed issues can misprice collateral. |
EIP / ERC support matrix
Standards support for DAI. Click an EIP to jump to the global deep-dive section.
| Standard | Status | Notes |
|---|---|---|
| ERC-20 Fungible token standard | Implemented | The MAX_UINT infinite allowance pattern means protocols that approve DAI once for MAX_UINT do not need repeated approvals. The src == msg.sender shortcut simplifies vault integration patterns where users call the vault directly without prior approval. |
| EIP-712 Typed structured data signing | Implemented | Prerequisite for the permit() function. DAI was a major reference implementation for EIP-712 adoption in the DeFi ecosystem. |
| EIP-2612 Permit — gasless ERC-20 approval | Partial | DAI invented permit-based approvals but its ABI is incompatible with the standard that followed. Any integration with both USDC-style and DAI permit needs two separate code paths. |
| EIP-3009 transferWithAuthorization | Not implemented | Building atomic single-transaction payment flows with DAI requires an intermediary contract that calls permit() then transferFrom() atomically. The DAI immutability means this gap is permanent. |
| EIP-1967 Standard proxy storage slots | Not implemented | Immutability is a trust property: no entity (including Sky Protocol governance) can change the DAI contract logic. For protocols that require maximum stability of their token dependency, this is valuable. Trade-off: bugs cannot be patched, features cannot be added. |
| EIP-1822 UUPS — universal upgradeable proxy | Not implemented | No profile row for this standard; treated as not implemented. |
| ERC-4626 Tokenized yield vault standard | Not implemented | No profile row for this standard; treated as not implemented. |
| EIP-1271 Signature validation for smart contracts | Not implemented | No profile row for this standard; treated as not implemented. |
Technical notes
MCD core contracts — Vat.sol (central accounting ledger for collateral and debt), Jug.sol (stability fee accumulator), Dog.sol (liquidation trigger), Clip.sol (Dutch auction liquidator), Pot.sol (DSR savings), Cat.sol (legacy liquidator). DAI is a standard immutable ERC-20. PSM: call gemJoin to swap USDC→DAI fee-less. Oracle: Medianizer aggregates from whitelisted price feeds. MKR→SKY migration ratio 1:24,000.
Reserves & peg
- Reserves
- ETH (~40%), stETH, WBTC, RWAs (~$948M), USDC via PSM
- Collateral
- On-chain crypto and RWAs
- Peg mechanism
- Algorithmic via DSR, PSM arbitrage, and liquidation mechanisms
- Auditor
- Trail of Bits, PwC (periodic), community-audited
Ecosystem
- DeFi integration
- Foundational — used as collateral, trading pair, and yield instrument across Aave, Compound, Curve, Uniswap
- Yield
- DSR variable (~4–8% historically)
Risk factors
mediumCollateral volatilitymediumGovernance attack vectormediumRWA counterparty riskmediumOracle manipulation
Networks & contracts
Deployments by chain — primary rows are highlighted. Always verify addresses against issuer docs before mainnet integrations.
| Network | Standard | Contract | Explorer |
|---|---|---|---|
EthereumPrimary | ERC-20 | 0x6B175474E89094C44Da98b954EedeAC495271d0FDAI — immutable contract | View |
ArbitrumSecondary | ERC-20 | 0xDA10009cBd5D07dd0CeCc66161FC93D7c9000da1 | View |
OptimismSecondary | ERC-20 | 0xDA10009cBd5D07dd0CeCc66161FC93D7c9000da1 | View |
PolygonSecondary | ERC-20 | 0x8f3Cf7ad23Cd3CaDbD9735AFf958023239c6A063 | View |
BaseSecondary | ERC-20 | 0x50c5725949A6F0c72E6C4a641F24049A917DB0Cb | View |
Engineering deep dive
Integration notes
DAI inherits Maker / Sky risk parameters: liquidations, PSM inventory, and oracle configuration can change via governance. Read Vat / Jug / Dog semantics before building leveraged products on DAI collateral.
Peg tooling
The PSM is the dominant on-chain peg stabiliser for integrations that need near-par USD stable swaps with governance-approved assets.