The DSR is a special module in the MakerDAO smart contract system that allows DAI holders to receive a share of the revenue earned by MakerDAO. This share was recently voted to be set to 1% APY.

MakerDAO pays deposits in the Dai Saving Rate the shown APY continuously on every block. You can deposit as much as you want and withdraw at any moment. There are no lock-ups and no fees for using the Dai Savings Rate.

The yield comes from the profits generated by MakerDAO. Since Maker wants Dai to be used extensively in DeFi it has a mechanism for incentivizing users to hold Dai. Redistributing a part of the profits of MakerDAO for the Dai Savings Rate makes Dai grow. 

How much does it cost?

This Earn Strategy is free of charge. All you have to pay are the gas fees for each transaction.

You don't need to manage this position; you will Earn more Dai at the rate shown continuously until MakerDAO adjusts the rate.

This is a long-term position; you can leave your Dai in the Dai Saving Rate contract for as long as you need or wish to. Even in cases where Maker reduces the Dai Savings Rate, your Dai will remain there until you withdraw it. You don't need to do anything if the Dai Savings Rate changes.

The rate could be adjusted up or down without prior notice; generally, rate adjustments will be announced in advance, and we will communicate the changes on all our channels, such as Discord or Twitter.