sDAI Explained: Yield, Safety, and the sUSDS Migration
sDAI is one of the oldest yield-bearing stablecoin tokens still in circulation, and it is quietly being phased out. Understanding what it does (and why capital keeps leaving it) is the fastest way to decide whether it still belongs in a stablecoin allocation. RWTS isn't bullish or bearish on any token. We're the credit-rating agency for tokenized real assets. We rate. You decide.
Start with the verdict. sDAI carries an RWTS Trust Score of T3 (72/100), one point below its successor sUSDS at T3 (74/100). Both are safe by construction (they share the same collateral pool) but for new deposits, sUSDS is the better default. For existing sDAI holders, the migration is cheap and usually worth it.
What is sDAI?
sDAI is an ERC-4626 wrapper around DAI deposited into the DAI Savings Rate (DSR) module. The token does not rebase. Instead, the DAI-per-sDAI redemption rate climbs block by block, so your token count stays fixed while each token becomes redeemable for more DAI over time. This is the same non-rebasing mechanism used by Aave's aTokens.
The yield source is straightforward. sDAI is the older DAI Savings Rate wrapper, still live after MakerDAO's rebrand to Sky. The contract accrues yield from the DSR, which tracks closely to, but is not always identical to, the SSR. That rate is not a market-clearing lending rate. It is a governance-set parameter, so it moves in discrete steps rather than fluctuating with pool utilization.
Where does the money come from? The DSR draws on the same collateral that backs DAI and USDS. Sky funds it from three internal yield streams: real-world asset collateral generating Treasury bill returns, the Spark borrow rate paid by users borrowing USDS against collateral, and stability fees from USDS minted via the original CDP system. That RWA-heavy backing is a meaningful shift from Maker's crypto-native origins.
Is sDAI safe?
sDAI's T3 (72/100) score reflects two things the Trust Score weighs heavily: smart-contract surface and a governance-administered rate. Neither is a solvency flag. sDAI shares Sky's surplus buffer and collateral set with both DAI and USDS, so the peg mechanics are the same battle-tested system that has held DAI's dollar peg since 2017. If you want the full rubric behind these numbers, see our methodology.
The honest risk framing: the token remains fully composable, which is its main advantage over its successor. Many DeFi integrations still list sDAI by default because it shipped first, and the token remains composable across Aave, Morpho, Curve, and Uniswap V4 pools. If your position needs to plug into a protocol that hasn't integrated USDS yet, staying on sDAI can be the rational choice.
sDAI vs sUSDS: the migration story
Here is what actually changed. sDAI was the first yield wrapper Sky (then MakerDAO) shipped, and it grew into a cornerstone product. sDAI was MakerDAO's first yield-bearing wrapper and reached over $1.5B in supply at its peak. sUSDS replaces sDAI as the primary yield wrapper and is the form Sky now promotes in integrations. Since the Sky rebrand, most of that savings capital has rotated into sUSDS.
The migration is not forced, and both tracks still earn. Does sDAI still earn yield? Yes. The DAI Savings Rate remains live alongside the Sky Savings Rate for sUSDS. Both rates are set by Sky governance and can differ. The gap between them is the whole decision. As of Q2 2026, DSR sits roughly 50 to 100 basis points below SSR, with the exact gap reset by governance as the migration completes.
For most holders, the math points one way. For new positions, sUSDS pays more and is the canonical track Sky is steering toward. For existing sDAI positions, migration is one transaction (sDAI to DAI, DAI to USDS, USDS to sUSDS) and gas-only. The pickup is the SSR minus DSR spread, which has run 50-150 bps across 2025-2026. Most holders should migrate unless there is a specific integration reason to stay on DAI.
Where sDAI sits in a stablecoin allocation
If your goal is the cleanest possible dollar yield, sUSDS is the successor product and the higher-rated one. If your goal is composability across the widest set of DeFi venues today, sDAI still has the deeper integration footprint. And if your goal is a lower-risk, higher-trust dollar holding with no wrapper mechanics at all, USDC at T2 (88/100) is a cleaner base, you can then choose where to deploy it for yield.
One conditional worth naming: the DSR and SSR are both governance-set. If Sky governance narrows the spread to zero, the case for migrating weakens to a rounding error. If the spread widens, staying on sDAI starts costing measurable basis points. Watch the Sky governance rate votes, not the price, the token trades at par to its accrued value by design.
For a broader view of how the yield-bearing dollar landscape stacks up, see the stablecoin yield hub, and our companion breakdown, Tokenized Money Market Fund Explained: BUIDL, BENJI, WTGXX, for the T-bill-backed alternative to savings-rate tokens.
The bottom line: sDAI is safe, still earning, and still useful, but it is the legacy track. For most allocators, the sUSDS migration is a gas-only trade that captures 50 to 150 basis points. We rate. You decide.
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