Savings DAI (sDAI) is an ERC-4626 yield bearing token representing DAI deposited in the Dai Savings Rate (DSR) module.

In short, sDAI is a yield bearing stablecoin.

Support and integration for ERC-4626 tokens is fairly limited as their use case has primarily been around representing complex strategies, where transfering the token is not a major use case. With sDAI, transfering the token is a major use case which finds a big limitation: 1 sDAI is worth more than 1 DAI (1 USD) so how can a user easily transfer 100 USD worth of sDAI to someone?

Right now the user would need to calculate it by themselves, but ERC-4626 has a function to solve for this called ‘convertToShares’ but you won’t find it in any wallets or UIs.