The short answerDAI has held through Black Thursday, the 2022 credit collapse and the 2023 banking scare, and its collateral is verifiable on-chain by anyone. Its independence is partial: a large share of backing is USDC and similar assets, so it inherits exactly the centralised risk it was designed to avoid.
Best forThe longest-running decentralised stablecoin
Reserve qualityweight 30%
7.5avg 7.7
Attestation & auditweight 20%
7.0avg 7.2
Peg recordweight 20%
8.5avg 8.0
Redemption accessweight 15%
8.5avg 7.5
Regulatory standingweight 15%
6.0avg 6.6
this service category average across 15Score = Σ mark × weight. Works well for a specific use case, weaker outside it. Methodology.
| Criterion | Mark | What we found | Source | Checked |
|---|
| Reserve quality | 7.5 | not sourced yet | not sourced yet | — |
| Attestation & audit | 7.0 | not sourced yet | not sourced yet | — |
| Peg record | 8.5 | not sourced yet | not sourced yet | — |
| Redemption access | 8.5 | not sourced yet | not sourced yet | — |
| Regulatory standing | 6.0 | not sourced yet | not sourced yet | — |
What we liked, and what fell short
Liked- Longest peg record of any crypto-collateralised stablecoin
- Backing is verifiable on-chain at any moment
- No freeze function on the original token
Fell short- Heavily collateralised by centralised stablecoins, so it inherits their risk
- Traded above peg during the 2023 USDC event because of that dependency
Why the marks landed where they did
DAI is the oldest decentralised stablecoin still in circulation and the only one with a peg record spanning multiple full market cycles. That record is the strongest argument any stablecoin in this category can make.
The stress tests it survived
March 2020: liquidation auctions failed under congestion, leaving bad debt, and the system recapitalised through a governance-run MKR auction. May 2022: Terra collapsed and DAI held. March 2023: USDC depegged, and because DAI was heavily collateralised by USDC, it traded above par as users fled toward it and below as the collateral wobbled — before recovering with the underlying.
The independence question
That 2023 episode is the clearest statement of DAI's central compromise. A stablecoin designed to be independent of banks is significantly backed by a stablecoin that depends on them. The reason is practical — crypto collateral is volatile and capital-inefficient — and the consequence is that DAI's peg partly rests on Circle's balance sheet.
What remains genuinely different
No freeze function on the original DAI token, on-chain verifiable collateral positions, and a governance process that operates publicly. Those properties are real and are why some users still hold DAI rather than USDS.
Who should use it
Users who want a stablecoin without a freeze function and with the longest peg record available, and who understand that its backing is not as independent as its design implies.
FAQ
Is DAI decentralised?+
Its governance and collateral positions are on-chain and verifiable, but a large share of backing is centralised stablecoins, so its independence is partial.
Has DAI ever lost its peg?+
It has traded above and below par during crises, notably in March 2020 and during the 2023 USDC depeg, returning to peg each time.
Can DAI be frozen?+
The original DAI token has no freeze function. Its successor USDS does, which is one reason some users continue to hold DAI.
Should I hold DAI or USDS?+
USDS pays a native savings rate and includes freeze functionality; DAI does neither. The choice depends on whether the yield or the absence of a freeze function matters more to you.
