Maker DAO DeFi project review

maker-dao

The Maker DAO, also known as the Multi-Collateral DAI (MCD) DeFI system, allows users to generate DAI token by leveraging collateral assets approved by “Maker Governance.” Maker Governance is the community organized and operated process of managing the various aspects of the Maker Protocol. DAI is a decentralized, unbiased, collateral-backed cryptocurrency soft-pegged to the US Dollar. Resistant to hyperinflation due to its low volatility, Dai offers economic freedom and opportunity to anyone, anywhere.

Maker is a permissionless lending platform responsible for the creation of DAI, the first decentralized stablecoin, built on Ethereum.

As what many would call the very first DeFi project, Maker has long since held the #1 ranking on virtually all DeFi tracking platforms when it comes to the total amount of ether (ETH) locked within the system.

For those unfamiliar with Maker, the platform allows any user to autonomously take out a loan (denominated in Dai) by staking digital assets such as ether (ETH) as collateral. The system is inherently permissionless, meaning that there are no KYC requirements necessary to get started. Furthermore, all lending actions are performed by smart contracts, meaning that no human is involved in the facilitation of any specific loan.

“Once generated, Dai can be used in the same manner as any other cryptocurrency: it can be freely sent to others, used as payments for goods and services, or held as long term savings. Most importantly, the generation of Dai in this manner creates the components needed for a robust decentralized lending platform.”

Maker leverages a native token, MKR, which is primarily used as a governance token to vote on new upgrades to the platform. Outside of governance, MKR is used to pay for stability fees (described below) and, in the case of emergency, sold as a last resort for bootstrapping the network to ensure Dai maintains it’s 1:1 peg with the US Dollar.

 

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