DAI is maintained and regulated by MakerDAO, a decentralized autonomous organization composed of the owners of its governance token, MKR, who may propose and vote on changes to certain parameters in its smart contracts.

[3] DAI is created and destroyed through an overcollateralized loan and repayment process facilitated by MakerDAO's smart contracts in the form of a decentralized application.

Added interest that borrowers pay back, on top of their loan's principal, is used to buy MKR tokens from the market and "burn" them, taking them permanently out of circulation.

[6] In 2018, MakerDAO formed the Maker Foundation, run from Copenhagen, which funds projects in the system, such as the writing of code needed for the platform to function and adapt.

[4] In March 2020, as a result of market volatility at the onset of the COVID-19 pandemic, DAI experienced a deflationary deleveraging spiral that, at its peak, caused it to trade for up to USD $1.11[citation needed] before returning to its intended $1.00 valuation.