MakerDAO, What do you know about this project?

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MakerDAO is a blockchain-based project aiming at disrupting the money. The project claims its product a “digital currency that can be used by anyone, anywhere, anytime.

The mentioned product is DAI cryptocurrency – a stablecoin to be specific. The team behind MakerDAO claims that their currency is the first unbiased one in the world, and any individual or enterprise can use it freely for financial applications. They chose stablecoin as the underlying currency of the system so that the users can have peace of mind about volatility and real-world use cases. DAI stable coin is pegged 1:1 to USD.

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What is MakerDAO?

The project behind DAI stablecoin started in 2015 named MakerDAO. It is now the name of the protocol that maintains the currency. The team behind the project didn’t use traditional fundraising or ICO to get investment. They sold MKR tokens to first investors. The stablecoin was launched in 2018.

MakerDAO is governed and managed in a community-based manner. Maker Foundation – formerly known as Maker Ecosystem Growth Foundation – is a group consisting of active members of the community. This group tries to fuel the first steps of growth for the Maker community and move it towards full decentralization.

MakerDAO foundation has contributed to the growth of the Maker community by providing development helps like Multi-Collateral DAI. But the foundation isn’t the centralized decision-maker member in the community. They call themselves a part of that community that is managed and works on a voting basis.

Rune Christensen is the founder and CEO of the MakerDAO foundation, and Steven Becker works as President and COO. Christensen introduced the basic idea of the MakerDAO project with a blog post in 2015 about a new concept named eDollar on Ethereum subreddit.

MakerDAO’s name was chosen to show the goal and features of the project. Maker came from the Market Maker term. The team behind the project wanted to incentivize the interested active users in the blockchain community to cooperate on the project and grow the market. DAO stands for Decentralized Autonomous Organization that shows the decentralized governing structure of the protocol.

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MKR and DAI coin

MKR token, an ERC-20 token on Ethereum blockchain, is the governance token of MakerDAO. Besides, the recapitalization in protocol happens using MKR. MKR holders can vote for decisions on the Maker Protocol that affect the whole community.

One million MKR token was initially made at the launch of the project. Fundamental parameters in the protocol are chosen, changed, and managed by voting between MKR holders.

The voters decide on some elements like Stability Fees, the DSR, Debt Ceilings, and many others. Voting also happens on non-technical terms and conditions like governance procedures.

The users in the MakerDAO community that hold MKR token have some responsibilities regarding the community’s growth and keeping the Protocol safe.

MKR tokens are used to control the volatility of DAI, too. “MKR is destroyed when the Maker Protocol’s system surplus exceeds a minimum threshold, resulting in excess DAI being auctioned for MKR that is then destroyed. Inversely, when the Maker Protocol is running a deficit and the system debt exceeds a maximum threshold, MKR is created and auctioned for DAI in order to recapitalize the system.”

DAI is the main stablecoin of the Maker project. But it’s not a hard-pegged currency and uses a free-floating peg system that had less volatility against USD. As mentioned above, the price of this token is kept as stable as possible using financial incentives for MKR holders. DAI token is currently on Ethereum blockchain and acts like any other cryptocurrency regarding transactions and tradings.

There are multiple use cases for stablecoins like DAI in the real world. It can be saved as a store of value in times of high volatility in financial markets. Besides, traders can use DAI as their stable asset to trade against. Some users also find this stablecoin the right choice for collateral use cases.

MakerDAO Ecosystem

MakerDAO consists of multiple projects and companies working to grow the community and also spread the word about use-cases. Many dApps and projects use the Maker Protocol and work with DAI to provide service to users. Airbus, imToken, Origin Protocol, and Wirex are some of the applications made by the Maker community. Maker Foundation has developed some essential tools and services for the company that is as follows:


Oasis is a platform from Maker Foundation focused on trade, borrow, and saving of DAI. The foundation calls it a tool for decentralized finance, as the Oasis app helps users do the financial works in blockchain-based decentralized service. Users can exchange their tokens, borrow, and even earn more tokens by saving some DAI in the platform. The fundamental technology in this platform is the smart contract system of Ethereum.


Maker Foundation developed the Migrate tool for users to move their DAI and CDP tokens after system updates to the newest versions. The platform connects the user’s current wallet and helps them migrate literally. Trezor, Ledger Nano, Wallet Connect, and Coinbase Wallet are supported in the Migrate platform.


The vote-based governance system of Maker Protocol has a platform developed by Maker Foundation. MKR holders access the platform and choose any decision or strategic move on the poll to vote for.

SCD Portal

Single-Collateral Dai was the previous collateral system in the Maker Protocol. The system changed to Multi-Collateral Dai. The Foundation rewrote the whole smart contract system and shut down the SCD on May 12, 2020. Users that had single collateral tokens (Sai) had to migrate their holdings before the shutdown. But the migration is still accessible through the Migrate app.

In fact, the SAI and CDP systems were designed for lending applications in the Maker Protocol and now work with the new system. Users locked ETH as collateral in CDP and would get SAI stablecoin to use in various applications. After they pay back the SAI with the addition of stability fee, the locked-down ETH will be paid back.

Maker Foundation Contact Links


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