MakerDAO is a decentralized autonomous organization and smart contract system on Ethereum, providing the first decentralized stablecoin, Dai, on Ethereum. DAI is a hard currency backed by digital asset collateral, maintaining a 1:1 peg to the US dollar. MKR is the governance and utility token of the Maker system, used to pay stability fees for borrowing Dai and to participate in the governance of the system. Unlike the Dai stablecoin, MKR's value is closely correlated with the performance of the entire system due to its unique supply mechanism and role within the Maker platform. The decentralized stablecoin Dai has key applications in collateralized loans, leveraged trading, hedging, international remittances, supply chains, and government accounting.

1. Maker DAO Tokens

The Maker DAO system comprises multiple smart contracts (Sai Tap, Sai Tub, Vox, Medianiser, etc.) and ERC-20 tokens. These work together to ensure the stability of the DAI token.

2. Project Features

1. Balancing System Conflicts:

If ETH were to depreciate rapidly, the value of Dai's collateral would plummet, leading to a system collapse. A large number of Dai holders would rush to redeem their holdings, causing Dai's value to decline sharply. This is analogous to a bank run, where a large number of depositors withdraw their funds, creating a liquidity crisis for the bank. To address this, Maker created the MKR token. The collateralization ratio of CDPs is determined by a vote among MKR holders. As system administrators, they receive certain rewards. However, when the collateral within the system is insufficient to cover the value of Dai, new Dai is created using MKR to compensate. This provides a strong incentive for MKR holders to regulate the creation of Dai. If the system fails, they bear the loss, not the Dai holders. The MKR token balances the conflicts within the system, stabilizes Dai's value to the US dollar, and enhances investor confidence.

2. Ultimate Safeguard - Global Settlement:

While the system has multiple layers of protection to prevent collapse, the Maker team has implemented a Global Settlement system to safeguard user interests and mitigate unforeseen crises. When triggered, the entire system freezes, and all Dai and CDP holders receive their collateral back. If a Global Settlement is initiated, a user holding 100 Dai, with 1 ETH valued at $100, can directly exchange their 100 Dai through a smart contract. Global Settlement can be triggered by a group of trusted individuals holding Global Settlement keys. Its sole function is to return collateral, not to execute trades on behalf of users, making it a decentralized design that minimizes losses.

3. Leverage Function:

Within the Maker system, Dai essentially functions as a loan obtained by exchanging ETH. Users can use this Dai to purchase more ETH from the market and repeat the process. While the collateralization ratio gradually reduces the amount of Dai that can be borrowed, it enables users to leverage their assets, giving the system a strong financial aspect. This is similar to using a bank loan secured by collateral to purchase more real estate, both utilizing financial leverage.

Related Links:
https://linux.cn/article-10862-1.html
https://makerdao.com/en/