MakerDAO

MakerDAO is a decentralized autonomous organization on the Ethereum blockchain that governs the Maker Protocol and the DAI stablecoin. It was created to issue and maintain a cryptocurrency that remains broadly stable relative to the US dollar.

The Maker Protocol uses collateralized debt positions, known as Vaults (formerly CDPs), to mint DAI. Users lock collateral assets into a Vault and generate DAI up to a debt ceiling, with the loan requiring a minimum collateralization ratio. If collateral value falls below the required ratio, the Vault may be liquidated through automated auctions to repay the debt. Borrowing incurs a stability fee, and the system uses risk controls such as debt ceilings and collateral-type parameters to manage liquidity and risk. DAI is designed to maintain a near-1:1 peg to the USD through these mechanisms and governance decisions.

The DAI Savings Rate (DSR) allows users to earn yield by locking DAI in a dedicated contract. Governance of the Maker Protocol is carried out by MKR token holders, who vote on proposals to adjust risk parameters, add or remove collateral types, set stability fees, and modify other protocol settings. Proposals are implemented through Maker Improvement Proposals (MIPs) and on-chain voting, enabling on-chain decision making.

MakerDAO originated with the Maker Foundation to advance the project, but it has moved toward a fully decentralized governance model. The Maker ecosystem is integrated with the broader Ethereum and decentralized finance landscape, and DAI is widely used across DeFi applications and lending platforms.