What is Single Collateral Dai (SAI)?

Quick Facts

  • Token symbol: SAI (formerly DAI)
  • Created by: MakerDAO (now Sky Protocol)
  • Blockchain: Ethereum
  • Collateral type: Ether (ETH) only
  • Peg target: 1 US Dollar
  • System shutdown: 2020, after Multi-Collateral Dai launched
  • Predecessor to: Multi-Collateral DAI (DAI)

Introduction

Single Collateral Dai, known by its ticker SAI, was MakerDAO's first decentralized stablecoin. It was designed to maintain a soft peg to the US Dollar without relying on a central issuer — a groundbreaking concept in the early days of decentralized finance.

SAI is now a legacy token. The system that generated it was formally shut down in 2020, replaced by the more flexible Multi-Collateral Dai (DAI) system.

History & Background

MakerDAO began development in 2015, with teams distributed across the globe. In December 2017, the first formal whitepaper introduced the original Dai Stablecoin System, which generated what is now called SAI.

In November 2019, MakerDAO launched Multi-Collateral Dai (MCD), replacing the old system. The original token was renamed from 'Dai' to SAI (Single-Collateral Dai) to distinguish it from the new version. In 2020, the MakerDAO community voted to formally shut down the SAI system after liquidity issues emerged.

How Single Collateral Dai Works

SAI was generated through smart contracts called Collateralized Debt Positions (CDPs). Users deposited ETH into a CDP, which minted SAI against that collateral. The process involved an intermediary token called Pooled Ether (PETH), which pooled all deposited ETH together.

If a CDP's collateral value fell below the liquidation ratio, the position could be liquidated. Stability fees — charged continuously on open CDPs — helped balance the supply and demand of SAI and maintain its dollar peg.

The system also included an Emergency Shutdown mechanism, controlled by trusted oracle addresses, which could freeze the protocol and allow SAI holders to redeem tokens directly for collateral.

Tokenomics

SAI was a debt-backed stablecoin: each token in circulation represented a unit of debt owed by CDP holders. Users repaid SAI to recover their ETH collateral. Stability fees were paid to the protocol and helped regulate SAI's supply dynamically. There was no savings rate for SAI holders — that feature was introduced only with Multi-Collateral DAI.

Circulating supply ? 2.66 million SAI
Reserved supply ? 0.00 SAI
undistributed
0x2cccc4b4708b318a6290511aac75d6c3dbe0cf9f
0.00 SAI
undistributed
0x8cc70d4a9fa194a5b4191aa415a81bd8f8bbe2f1
0.000 SAI
Total supply ? 2.66 million SAI
Max supply ? -- SAI
Updated 11m ago

Ecosystem & Use Cases

During its active years, SAI was widely used across the early DeFi ecosystem. It served as a stable medium of exchange, a unit of account, and collateral within various DeFi protocols. Many decentralized exchanges and lending platforms integrated SAI as one of their core assets.

Team, Governance & Community

SAI was governed by MKR token holders, who voted on key risk parameters such as the stability fee, liquidation ratio, and debt ceiling. The Maker Foundation played a coordinating role in the early years. The MakerDAO community ultimately voted to shut the SAI system down through on-chain governance in 2020.

Advantages

  • Decentralized issuance: No central party controlled SAI creation or redemption.
  • Pioneering design: SAI introduced the concept of a collateral-backed, algorithmically stabilized token to DeFi.
  • Transparent mechanics: All CDPs and system parameters were visible on-chain.
  • Emergency protections: The kill-switch mechanism protected users in extreme market events.

Risks & Challenges

  • Single collateral dependency: Being backed only by ETH meant SAI was highly exposed to ETH price volatility.
  • Liquidity risk: The system experienced significant liquidity issues in early 2020, contributing to its shutdown.
  • Legacy status: The SAI system is no longer active; tokens can only be redeemed for ETH via migration portals.
  • No savings rate: Unlike Multi-Collateral DAI, SAI holders earned no yield on their holdings.

Long-Term Vision

SAI represents a pivotal chapter in DeFi history. Its design laid the groundwork for the far more robust Multi-Collateral DAI system and proved that decentralized stablecoins backed by on-chain collateral were viable. While SAI itself is no longer in active use, its architecture influenced the entire subsequent generation of decentralized stablecoin protocols.

Frequently Asked Questions

SAI is MakerDAO's original decentralized stablecoin, soft-pegged to the US Dollar and backed solely by ETH collateral. It was the predecessor to the current Multi-Collateral DAI system.

SAI (Single-Collateral Dai) accepted only ETH as collateral, while Multi-Collateral DAI (DAI) supports multiple asset types. SAI also lacked the Dai Savings Rate feature that DAI introduced.

No. The MakerDAO community voted to shut down the SAI system in 2020. SAI holders were directed to redeem their tokens for ETH through the official migration portal.

Users locked ETH into Collateralized Debt Positions (CDPs) on MakerDAO to mint SAI. The collateral had to remain above a set liquidation ratio to avoid forced liquidation.

The system was shut down following the launch of Multi-Collateral DAI in November 2019 and significant liquidity challenges that emerged in early 2020. The MakerDAO community approved the shutdown through on-chain governance.

MKR token holders governed the system, voting on parameters like stability fees and liquidation ratios. Emergency Shutdown could be triggered by trusted oracle addresses chosen by MKR voters.

PETH (Pooled Ether) was an intermediary token users received when depositing ETH into the SAI system. It served as the direct collateral backing CDPs and helped the system manage undercollateralization risk.

SAI tokens may still exist on-chain, but the protocol that generated them is shut down. Remaining SAI holders were instructed to redeem tokens for ETH through MakerDAO's migration portal.