MakerDAO’s Dai has received the lion’s share of stablecoin coverage in recent months, with only Basis as a close runner-up. (Read our analysis of the Basis protocol here.) There are many reasons to be positive on Dai: the stabilization algorithm is well-thought-out, and they have a large and well-capitalized team behind it. In addition, it minimizes the risks to everyday users. However, we believe Dai will ultimately not work. Even if its stabilization algorithm could maintain the peg — which we are skeptical of — there’s a serious risk that it won’t be able to scale.