Glossary
sDAI
The MakerDAO/Sky-issued yield-bearing wrapper for DAI — depositing DAI into the Dai Savings Rate contract mints sDAI, which compounds the DSR yield automatically.
sDAI is the ERC-4626 wrapper around the Dai Savings Rate (DSR). Users deposit DAI into the contract and receive sDAI; the DSR yield is paid into the contract pool, so each sDAI is redeemable for an increasing amount of DAI over time.
The DSR is funded by the spread between MakerDAO's stability fees and its real-world-asset reserves yield, set by Maker / Sky governance. sDAI has become one of the most-used yield-bearing stables in DeFi, often serving as a base asset in lending and LP positions.