MakeDAO is a decentralized open-source project based on the Ethereum blockchain and a Decentralized Autonomous Organization (DAO) seeking to minimize the price volatility of its own stable token called Dai and to ensure its stability and transparency.
MakerDAO was founded in 2015 by Rune Christensen and now is managed by MKR token holders through the usage of Maker Protocol that enables the creation of cryptocurrency. Maker Protocol is built on four structural elements: Dai stablecoin, Maker Collateral Vaults, Oracles, and Voting, which frames the way how decisions are made within the community.
Dai stablecoin represents a decentralized unbiased, collateral-backed cryptocurrency based on the Ethereum Blockchain and attempting to maintain a value of 1 USD. All circulating Dai are generated from Maker Vaults and are backed by a surplus of collateral assets. As a crypto asset, Dai coin addresses four main functions:
- a store of value
- a medium of exchange
- a unit of account
- a standard of deferred payment.
Maker Collateral Vaults are intellectual contracts that are used to generate Dai. Users can access the Maker protocol and create Vaults using a number of various user interfaces, including Oasis Borrow, an integral part of Oasis application allowing to trade, borrow and save Dai.
Maker Oracles, including Price and Emergence Oracles, constitute a mechanism of broadcasting data from outside of the blockchain onto the blockchain. Oracles enable the use of price data of various assets to determine when to eliminate a Vault or how much Dai a given Vault can generate.
The core product provided by MakerDAO is Oasis. It is an open-source decentralized, non-custodial platform supporting Ethereum-based cryptocurrencies. Oasis is free to use, however, it is required to pay special fees associated with the Maker Protocol.