MakerDAO runs the Maker Protocol on Ethereum, issuing Dai, a decentralized stablecoin that maintains a US‑dollar peg through over‑collateralized, permission‑less Vaults. Users lock approved crypto assets to generate Dai, while automated collateral monitoring, liquidation, and a feedback mechanism adjust stability fees and savings rates. The system is governed by MKR token holders and integrates via open APIs and the Dai.js SDK for wallets, DeFi apps, and payment processors.
Funding
Funding not disclosed
Founders
Product
Problem
Cryptocurrency users and decentralized applications often lack a reliable, non‑volatile medium of exchange, forcing reliance on fiat on‑ramps or centrally managed stablecoins that can be censored or restricted. This volatility hampers everyday transactions, savings, and composability within DeFi protocols. Additionally, existing stablecoin solutions may not offer transparent, permission‑less issuance backed by diversified collateral.
Solution
MakerDAO operates the Maker Protocol, a set of open‑source smart contracts on Ethereum that issue Dai, a price‑stable, decentralized stablecoin. Users lock approved crypto assets into permission‑less Vaults to generate Dai on demand, with the system automatically managing collateral ratios and liquidations to preserve the peg. The protocol’s stability is maintained by a Target Rate Feedback Mechanism that adjusts the Dai Savings Rate and collateral requirements in response to market conditions. Governance is performed by MKR token holders, who vote on risk parameters, collateral types, and system upgrades, ensuring continuous, community‑driven risk management. Dai can be transferred, stored, or integrated directly into any DeFi application without intermediaries, providing a consistent unit of account across the ecosystem. Comprehensive developer tools, including the Dai.js SDK and open APIs, enable seamless integration of Dai into wallets, payment processors, and smart contracts.
Target Audience
The primary users are crypto holders, DeFi developers, and businesses that require a stable, programmable digital currency for payments, savings, or collateralized lending. Additionally, institutional participants seeking transparent, decentralized exposure to a stable asset benefit from Dai’s open architecture.
Features
- Permission‑less Vaults that accept multiple collateral types (e.g., ETH, BAT, USDC) for on‑chain Dai generation
- Automated collateral ratio monitoring and liquidation engine to enforce over‑collateralization and protect the peg
- Target Rate Feedback Mechanism (TRFM) that dynamically adjusts the Dai Savings Rate and stability fees based on market data
- Decentralized governance framework where MKR holders vote on risk parameters, new collateral onboarding, and protocol upgrades
- Dai.js JavaScript library and RESTful APIs for rapid integration into dApps, wallets, and payment gateways
- Full on‑chain auditability with transparent accounting of collateral deposits, debt positions, and governance proposals
- Compatibility with major DeFi composability standards (ERC‑20, ERC‑4626) and support for cross‑chain bridges via third‑party adapters