Transcriptional regulator and common SMAD (co-SMAD), required to regulate entry into a developmentally arrested larval state known as dauer, in response to harsh environmental conditions (PubMed:9334330). Probable component of transcriptional regulatory complex with SMAD protein daf-5 (PubMed:14681186). Acts antagonistically to SMAD signaling downstream of TGF-beta-like daf-7 signaling (PubMed:20081192). Binds to the 5'-GTCTG-3' motif found in regulatory regions and may modulate the expression of genes involved in TGF-beta-like daf-7 and Notch lag-2 signaling (PubMed:20081192, PubMed:9834189, PubMed:28811311). May regulate gene expression outside the dauer pathway (PubMed:9834189). Interacts with R-SMADs daf-8 and daf-14 (PubMed:20081192). Interacts with daf-14 in a daf-8 dependent manner (PubMed:20081192). May interact with daf-5 (PubMed:14681186). Localization observed during mitosis. Belongs to the dwarfin/SMAD family.