Savings DAI (sDAI) was an ERC-4626 token that represented DAI deposited in the Dai Savings Rate (DSR) module. It enabled users to earn yield from the Sky Protocol while retaining the ability to use sDAI for transfers, staking, lending, and other DeFi functions. ^{[1] [2]}

Overview

Savings DAI (sDAI) was an earlier version of Savings USDS (sUSDS) and functioned as a tokenized representation of DAI deposited into the Dai Savings Rate (DSR) on the Sky Protocol. sDAI allowed holders to earn yield from the DSR while maintaining the ability to use the token across various DeFi applications. It was a non-rebasing, accumulating token that increased in DAI-denominated value over time and remained fully redeemable for DAI. The yield for sDAI came from the DSR, which had to be activated by depositing DAI into a specific smart contract. The DSR was funded by Sky Protocol’s revenue sources, including loan fees, U.S. treasury investments, and liquidity provisioning. Both the DSR and sDAI were non-custodial, permissionless, and governed by the Sky Protocol; Spark had no involvement or control over them. ^[2]

Features

sDAI was a non-rebasing, accumulating token—its DAI value increased over time, rather than updating user balances, making it suitable for integrations such as staking and lending. It provided transparent APY through the Sky Savings Rate and operated on non-custodial, permissionless smart contracts. sDAI could be utilized across DeFi applications, and its design ensured instant redemption of DAI. It was deployed primarily on Ethereum Mainnet, with alternatives like Savings xDAI on Gnosis Chain offering higher yields due to bridged DAI mechanics. ^[2]