The Maker Protocol, one of the largest decentralized apps on the Ethereum blockchain, was created by a diverse collection of developers and is administered by the MakerDAO. The MakerDAO is a global decentralized autonomous organization (DAO) comprised completely of MKR holders. These MKR token holders can use their MKR tokens to vote on proposed improvements to the Maker Protocol, as well as to ensure Dai's efficiency, transparency, and stability. Despite its many peculiarities, buying MKR is akin to owning stock in a traditional firm in the sense that shareholders have a vote in how the company operates. One of the earliest DeFi projects to reach substantial success was the Maker ecosystem.
The Maker ecosystem has gone through several stages, the first of which was the MakerDAO. Rune Christensen, a Danish entrepreneur and University of Copenhagen graduate, founded this in 2014. Christensen co-founded the recruiting company Try China after studying international business and biology before heading into blockchain.
Dai was formally released on the Ethereum network in 2017, and the following year saw the foundation of the Maker Foundation, an organization aimed at fuelling ecosystem growth and driving attempts to decentralize development. Christensen is the foundation's CEO, and other board members include President and COO Steven Becker, who formerly created Cubit Capital, and economist Shefali Roy.
How it works
Maker Vaults, which are smart contracts, are used by the Maker Protocol to manufacture new Dai. These contracts may be written using a variety of online UIs and applications that effectively serve as gateways to the network (such as Oasis Borrow or Instadapp). When a user wishes to withdraw their collateralized cryptocurrency from the smart contract, they must first pay back the Dai they created, as well as a stability charge.
The Maker Protocol can alternatively be governed by the MKR token. Voting proposals take the form of a smart contract and may be deployed by any Ethereum address. The MKR holders community may then vote on the proposal they want to pass, and the Ethereum address with the most approval votes in MKR is granted administrative permission to make the requested modification to the Maker Protocol.
DAI is a soft-pegged to the US dollar decentralized, impartial stablecoin. This may seem confusing, but in essence, it refers to a cryptocurrency whose price reflects the value of the dollar - without the need for a central authority. While blockchain technology offers exciting new potential for the banking sector, many people are hesitant to utilize Bitcoin as a means of exchange due to its extreme volatility. This is why Dai was created: to address the demand for a more reliable digital currency that allows us to fully utilize blockchain technology.
Dai is unbiased because it is not managed by a private company, unlike other stablecoins like USDT, and it is collateralized because new Dai can only be minted by a Maker Protocol user who deposits an appropriate number of other cryptocurrencies into a smart contract to back the new DAI being minted. Dai holders can also earn interest on their stablecoins through the Maker Protocol, with the amount defined by the Dai Savings Rate.
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