How DAI and USDS hold their peg

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Just minted and burned

USDS tokens DAI tokens tokens being burned keeper, bidding at auction a chain's ledger flashes as it settles vaults: Agents, USDC, ETH, SKY

A vault owner locks $120 M of ETH in an ETH-A vault and draws 60 M new USDS: a collateral ratio of 200 %. ETH-A vaults must stay above 145 %, and the debt grows by a 9.50 % yearly stability fee. The debt is kept in the Vat, Sky's core ledger; it could leave as DAI just as well. The tokens are on Ethereum, settled by its validators.
The peg stability module swaps 100 M USDC for 100 M USDS one for one, with no fee either way (directly for DAI, through a wrapper for USDS). It held about $4.0 B of USDC at the end of September 2026. It's the peg's anchor: when USDS trades under a dollar, swapping it for USDC at par earns the gap.
A holder upgrades 40 M DAI through the converter: the DAI is burned and USDS minted, one for one, with no fee. 50 M USDS goes into sUSDS, earning the Sky Savings Rate, 3.60 % on September 30, 2026. 10 M crosses to another chain over a bridge, locked in an Ethereum escrow while its copy circulates there, on Solana for example.
The owner pays back 20 M USDS. It's burned, the debt falls to 40 M and a third of the ETH is released. The ratio stays at 200 %: collateral came out in step with the debt.
The oracle's ETH price, which trails the market by an hour, falls 30 % and the vault's ratio drops to 140 %, under 145 %. The Dog seizes the vault and a Clipper opens a Dutch auction at 110 % of the oracle price, cutting it 1 % every 90 seconds. A keeper buys the ETH for 45.2 M, the debt plus a 13 % penalty, which leaves circulation; the ETH left over goes back to the owner.
On September 30, 2026 the Vat showed about $12.0 B behind 10.5 B USDS and DAI: $5.95 B drawn by Sky Agents such as Spark and Grove to lend and invest, $4.0 B of USDC in the PSM, $1.6 B of ETH and wstETH and $0.44 B of staked SKY in vaults. Only the vaults are over-collateralised on-chain; what the Agents hold is reported, not locked in the Vat.

The gauge reads each vault type from the Vat every minute. Liquidations appear when the Dog barks; the last one was on June 26, 2026.

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How this is read

USDS and DAI on Ethereum, from their contracts, less the tokens that exist but aren't in anyone's hands: DAI the PSM has minted in advance, and tokens locked in bridge escrows, which are counted on their own chains instead. USDS in sUSDS has its own row. Use the arrow keys to read each row.

Minted and burned

minted, up
burned, down

What just happened (illustrative) 0 USDS + DAI in circulation 0 collateral 0 minted 0 burned 0 chains shown

The parts that make this work

Two tokens, one system

MakerDAO launched DAI on Ethereum in December 2017 (as single-collateral "Sai") and relaunched it with many kinds of collateral on November 18, 2019. In August 2024 it renamed itself Sky and on September 18, 2024 launched USDS, sUSDS and the SKY token. Sky's own app offers USDS, and USDS is the token its savings rate and rewards are built around; DAI carries on as the older token. A converter swaps them one for one in either direction, and Sky's docs say that swap can never carry a fee.

Both are claims on the same ledger, the Vat. On September 30, 2026 the USDS contract showed 6.69 B tokens, 4.52 B of them in sUSDS, and the DAI contract 4.58 B, of which 0.81 B had been minted in advance for the PSM and hadn't reached anyone yet. Counting only tokens in someone's hands, on every chain this page reads, about 6.7 B USDS and 3.8 B DAI were in circulation.

Vaults, ratios and the stability fee

Anyone can open a vault, lock an approved collateral and draw tokens up to the vault type's limit. The debt grows with a yearly stability fee; repaying burns the tokens and unlocks the collateral. The crypto vault types on September 30, 2026, read from the Vat, Jug and Spotter:

Sky's main crypto vault types, September 30, 2026
Vault type	Minimum	Fee	Ratio now	Debt
ETH-A	145 %	9.50 %	407 %	176,637,895
ETH-C	170 %	9.25 %	445 %	176,885,993
ETH-B	130 %	10.00 %	294 %	5,934,827
WSTETH-A	150 %	10.50 %	333 %	18,006,838
WSTETH-B	175 %	10.25 %	729 %	5,168,595
SKY staking (LSEV2-SKY-A)	120 %	5.96 %	274 %	159,857,520

Ratios use the system's own oracle prices: $2,673.51 for ETH, and $0.025 for SKY, well under its market price of about $0.078 that day. Small WBTC vault types are being wound down. Addresses from Sky's chainlog.

The PSM and the Sky Agents

The LitePSM swaps USDC for DAI and back at exactly one dollar, and its fees in and out were both zero on September 30, 2026. The USDC it takes in, about $4.02 B that day, sits at a separate custody address. Whoever holds USDS or DAI can always leave through it as long as it has USDC, which ties the peg closely to USDC's.

The largest item is newer. Sky Agents (earlier called Stars), such as Spark and Grove, draw USDS at no fee through allocator vaults up to limits set by governance, and put it to work: lending on SparkLend and Morpho, and buying tokenized Treasury funds and credit. Their vaults held 5.95 B of debt on September 30, 2026: Spark 3.69 B, Grove 1.81 B, Obex 0.40 B and Prysm 0.05 B. A September 9, 2026 review by Yearn's risk team counted about 29 % of all backing as off-chain or attested, including $759 M in a Janus Henderson Treasury fund and $569 M in BlackRock's BUIDL. Those assets are reported, not locked in the Vat, and can't be liquidated by it.

Savings: the SSR and the DSR

USDS deposited in sUSDS earns the Sky Savings Rate; DAI in the Pot earns the DAI Savings Rate. Both are set by governance and paid from stability fees and the Agents' income. On September 30, 2026 the contracts read 3.60 % a year for the SSR and 1.25 % for the DSR. sUSDS held 4.52 B USDS; the Pot held about 202 M DAI, which is an internal balance, not a DAI token, and isn't in this page's totals. Live mode reads the SSR from the sUSDS contract every minute.

Liquidations

Since 2021 ("Liquidations 2.0") a vault under its minimum is seized by the Dog contract and sold by its type's Clipper in a Dutch auction. For ETH-A the price starts at 110 % of the oracle price, falls 1 % every 90 seconds, and restarts after two hours or below 45 % of the start. The winning keeper pays the debt plus a 13 % penalty; whoever triggers the auction earns 250 DAI plus 0.1 %. The oracle runs an hour behind the market on purpose, which gives vault owners time to act.

Liquidations come in bursts. The Dog logged 209 of them between August 2024 and September 2026, most in February and April 2025 and January 2026; the latest was an ETH-B vault on June 26, 2026, 150.7 ETH for 177,447 DAI of debt. The old auction system's worst day was March 12–13, 2020, "Black Thursday": keepers won about $8.3 M of ETH with zero bids, leaving about 5.7 M DAI of bad debt that MKR holders covered by selling newly minted MKR.

Governance: SKY and MKR

SKY holders vote on collateral, fees, rates and the Agents' limits, and executive votes change the contracts. MKR converts to SKY at a fixed 1 : 24,000; governance moved to SKY on May 19, 2025, and conversion has been one way since. A "delayed upgrade penalty" on converting MKR began in September 2025 and grows 1 % every three months; the converter charged 5 % on September 30, 2026. Part of Sky's profit buys SKY back on the market.

Other chains

USDS lives natively only on Ethereum. Sky's bridges lock it in an Ethereum escrow and mint a copy on Base, Arbitrum, OP Mainnet and Unichain; USDS reaches Solana through a LayerZero adapter (Wormhole until November 2025), and DAI exists on Arbitrum and OP Mainnet through older bridges. On September 30, 2026 these copies came to about 140 M, most of it on Arbitrum. A transfer on each is settled by that chain, and on Solana by Solana's validators; Ethereum's escrow is what backs the copy.

What live mode shows, and what the animation simplifies

Live mode reads USDS and DAI from Ethereum and eight bridged or native copies elsewhere, straight from public nodes. It reads every Ethereum block's USDS transfers, which gives the transfer rate and every USDS mint and burn, and polls DAI for its mints and burns. Many of those aren't new debt: an upgrade burns DAI and mints USDS, a PSM swap mints, an Agent drawing or repaying mints or burns; the feed names these where the address makes it clear. The collateral gauge and the vault fills come from the Vat, the Spotter and the join adapters every minute, and the Dog is watched for liquidations. The animation draws each kind of collateral as one box, and the step-by-step numbers are illustrative, about a tenth of the real system. Read Sky's developer docs for the details.