DAI is one of the two stablecoins that support the MakerDAO stablecoin ecosystem launched by MakerDAO in 2016. DAI’s purpose in the ecosystem is distinct, being the actual stablecoin, as opposed to its governance token counterpart that is MKR.
Stablecoins are being created with increasing frequency and it forms one of the major trends of 2019. However, unlike most other stablecoins, the DAI token differs from others as it does not back DAI tokens with dollar reserves. Rather, it supports the value of DAI tokens through Collateralized Debt Positions (CDPs). CDPs are smart contracts that provide DAI tokens which are backed by collateral (Ether), which it holds until the DAI is returned. This is an integral function in the MakerDAO ecosystem.
The technique used to keep DAI’s value stable at $1 is quite clever. In short, the DAI token is always collateralized and if its value sways from $1, the network is incentivized to push the value back to $1.
As the DAI token is simply a stablecoin, there is not much in the way of development for the specifically the token, though the team has released many details on the general development of the ecosystem.
Several changes have been made to the ecosystem in 2019, including updates on the Maker governance system that allowed multiple polls to be conducted simultaneously, security audits, a bug bounty program in collaboration with HackerOne, and a lot of progress towards multi-collateral DAI. Seven new collateral types have been put up for a first round of voting: Augur (REP), Basic Attention Token (BAT), DigixDAO (DGD), Ether (ETH), Golem (GNT), OmiseGo (OMG) and 0x (ZRX).
The rest of 2019, and going forward into 2020, will see a vote to finalize all the changes that would allow multi-collateral DAI, voting on oracle providers, a rebranding and a presentation of general risk proposal model to the community for review, and much more.