Trust Score pending calculation
Key Facts
- Peg Currency
- USD
- Backing Type
- Crypto Collateralized
- Audit Frequency
- None
- Reserve Ratio
- 100.50%
Global Regulatory Status
Reserve Attestation
Dai Stablecoin
Reserve Composition
Redemption
- Direct Redemption
- No
- No direct issuer redemption
- Exit via DEX or secondary markets
- Collateral liquidation possible
Chain Support
Historical Timeline
6 events from 2017 to 2023
2017
Trail of Bits
Full_audit
Multiple engagements since 2017 covering Single-Collateral DAI (SCD) security review, Multi-Collateral DAI (MCD) transition audit, and ongoing retainer for selected upgrades. Reviews included oracle manipulation vectors, governance privilege escalation, and core contract security.
2019
Runtime Verification
Full_audit→ March 1, 2020
Formal verification and mathematical proof of specific safety guarantees. Mathematical property verification and continuous invariant checking for MCD core contracts.
OpenZeppelin
Full_audit
MCD core contract assessments, formal verification of core properties, and Defender integration for operational security. Automated monitoring infrastructure deployment.
2020
MakerDAO Black Thursday - DAI Depeg and Bad Debt Crisis
According to MakerDAO post-mortem analysis and DeFi Pulse data, DAI experienced a severe depeg to approximately $1.20 (20% premium) during the March 12, 2020 ETH price collapse. The protocol generated $4.5 million in bad debt due to auction failures, requiring MKR token auction recapitalization.
2022
DAI Depeg During Terra/Luna Collapse
According to CoinGecko data and DeFi Llama analysis, DAI temporarily depegged to approximately $0.98 during the Terra/Luna stablecoin collapse in May 2022. The Peg Stability Module (PSM) experienced heavy utilization as arbitrageurs exploited temporary price discrepancies.
2023
DAI Depeg During Silicon Valley Bank Collapse - USDC PSM Exposure
According to CoinGecko data and MakerDAO governance forums, DAI depegged to below $0.98 during the March 2023 USDC depeg event caused by Silicon Valley Bank collapse. Approximately 50% of DAI collateral was USDC via the Peg Stability Module (PSM), creating direct correlation risk.
Financial Incidents
3 incidents recordedDAI Depeg During Silicon Valley Bank Collapse - USDC PSM Exposure
HighMarch 10, 2023
According to CoinGecko data and MakerDAO governance forums, DAI depegged to below $0.98 during the March 2023 USDC depeg event caused by Silicon Valley Bank collapse. Approximately 50% of DAI collateral was USDC via the Peg Stability Module (PSM), creating direct correlation risk.
0Details
On March 10, 2023, Silicon Valley Bank collapsed, causing USDC to lose its peg and trade as low as $0.87. DAI experienced a corresponding depeg to approximately $0.97-$0.98 because approximately 50% of DAI's collateral at the time was USDC held in the Peg Stability Module (PSM). This exposed a critical correlation risk: DAI's stability partially depended on USDC's stability. The event motivated MakerDAO governance to accelerate plans to diversify collateral away from centralized stablecoins and increase Real World Asset (RWA) exposure. Following the federal backstop announcement on March 12, 2023, both USDC and DAI regained their pegs by March 13. The incident highlighted the irony that a 'decentralized' stablecoin (DAI) relied heavily on a centralized stablecoin (USDC) for collateral, creating systemic interdependence.
Customer Impact
DAI holders experienced temporary price deviation (~3%). No liquidations occurred in MakerDAO vaults directly, but DAI-backed positions in other protocols faced stress. Users could exit via PSM, but received depegged USDC.
Issuer Response
MakerDAO governance accelerated RWA diversification strategy post-crisis. Increased Treasury exposure via Monetalis Clydesdale and BlockTower partnerships. Reduced target USDC PSM exposure from ~50% to ~15%. Enhanced transparency around collateral composition.
Sources
DAI Depeg During Terra/Luna Collapse
MediumMay 12, 2022
According to CoinGecko data and DeFi Llama analysis, DAI temporarily depegged to approximately $0.98 during the Terra/Luna stablecoin collapse in May 2022. The Peg Stability Module (PSM) experienced heavy utilization as arbitrageurs exploited temporary price discrepancies.
0Details
During the Terra/Luna ecosystem collapse in May 2022, DAI experienced temporary selling pressure and depegged to approximately $0.98, a 2% deviation from its $1.00 target. Unlike UST, which collapsed catastrophically, DAI maintained overcollateralization throughout the event. The Peg Stability Module (PSM) saw massive inflows of USDC as users minted DAI at the $1.00 peg price to sell at the slight premium on exchanges, helping restore the peg within approximately 72 hours. The event validated DAI's overcollateralized design versus algorithmic alternatives like UST. No bad debt was generated, and the protocol remained fully solvent. The brief depeg demonstrated the effectiveness of the PSM mechanism while highlighting correlation risks during broad stablecoin market stress.
Customer Impact
DAI holders experienced minimal price deviation (2%). No liquidations or bad debt occurred. Users could redeem through PSM at $1.00 throughout the event.
Issuer Response
The protocol's automated mechanisms (PSM arbitrage, liquidation system) functioned as designed. No governance intervention required. The event validated overcollateralized stablecoin design principles.
Sources
MakerDAO Black Thursday - DAI Depeg and Bad Debt Crisis
CriticalMarch 12, 2020
According to MakerDAO post-mortem analysis and DeFi Pulse data, DAI experienced a severe depeg to approximately $1.20 (20% premium) during the March 12, 2020 ETH price collapse. The protocol generated $4.5 million in bad debt due to auction failures, requiring MKR token auction recapitalization.
Details
On March 12, 2020, Ethereum prices collapsed approximately 50% in 24 hours amid global market turmoil (COVID-19 pandemic onset). MakerDAO's single-collateral DAI (SCD) system experienced severe stress. The Keeper (liquidator) ecosystem became congested due to high gas prices and network congestion, causing multiple collateral auctions to complete with near-zero bids. This resulted in $4.5 million in undercollateralized debt (bad debt) that the protocol could not cover from liquidation proceeds. To recapitalize the system, MakerDAO governance executed an emergency debt auction (FLIP auction), diluting MKR holders by auctioning newly minted MKR tokens. DAI traded at a premium of up to $1.20 (20% above peg) due to supply contraction as users paid back DAI to close vaults and avoid liquidation. The incident exposed critical infrastructure risks: Keeper concentration (too few liquidators), auction design flaws, and oracle latency issues. The crisis led to the emergency implementation of the Multi-Collateral DAI (MCD) system and enhanced auction mechanisms.
Customer Impact
Vault holders experienced liquidations at near-zero prices, losing collateral value. DAI holders who sold during the premium realized gains, but the event demonstrated systemic protocol risk. MKR holders were diluted through emergency token auctions to cover bad debt.
Issuer Response
MakerDAO governance executed emergency MKR token auctions (FLIP auctions) to recapitalize the $4.5M bad debt. Implemented emergency shutdown procedures for SCD. Accelerated transition to Multi-Collateral DAI (MCD) with enhanced auction mechanisms. Improved oracle infrastructure and Keeper ecosystem incentives. Introduced circuit breakers and liquidation thresholds.
Sources
Audit History
Runtime Verification
September 1, 2019 → March 1, 2020
Formal verification and mathematical proof of specific safety guarantees. Mathematical property verification and continuous invariant checking for MCD core contracts.
- • Formal verification limited to specified properties and invariants
- • Does not cover all possible contract states or edge cases
- • Changes to verified contracts require re-verification
Change reason: Engaged to provide mathematical proofs of critical safety properties for MCD launch
OpenZeppelin
August 1, 2019 → Present
MCD core contract assessments, formal verification of core properties, and Defender integration for operational security. Automated monitoring infrastructure deployment.
- • Formal verification covers specific properties, not all contract behavior
- • Defender monitoring infrastructure covers operational security, not financial risk
- • Upgradeable contract architecture introduces risks between audits
Change reason: Engaged for MCD launch security review and ongoing operational security monitoring
Trail of Bits
June 1, 2017 → Present
Multiple engagements since 2017 covering Single-Collateral DAI (SCD) security review, Multi-Collateral DAI (MCD) transition audit, and ongoing retainer for selected upgrades. Reviews included oracle manipulation vectors, governance privilege escalation, and core contract security.
- • Point-in-time reviews, not continuous monitoring
- • New governance proposals reviewed on retainer basis, not all proposals
- • RWA oracle integration complexity may exceed audit scope
- • SubDAO cross-contract interactions not fully scoped in all engagements
Change reason: Ongoing retainer relationship for core protocol security reviews since 2017