DAO (Decentralized Autonomous Organization), meaning "decentralized autonomous organization", MakerDAO belongs to the DAO project. Maker is an automated mortgage loan platform on Ethereum, and a smart contract platform running on the Ethereum blockchain. Maker provides a stable currency Dai to establish a decentralized derivative financial system on Ethereum.
More blockchain technology and application classification:
Blockchain applicationBlockchain development
Ethernet Square | Fabric | BCOS | cryptography | consensus algorithm | bitcoin | Other chain
Token Economy | Traditional Financial Scenarios | Decentralized Finance | Anti-counterfeiting Traceability | Data Sharing | Trusted Deposit
Decentralized finance:
- A preliminary exploration of MakerDAO
- Introduction to Decentralized Lending Compound Project
- Synthetix, a decentralized derivatives protocol
- Decentralized fund management TokenSets
- Decentralized Lottery PoolTogether
- Decentralized payment and Sablier
- Uniswap of Decentralized Exchange (DEX)
- DYdX of Decentralized Exchange (DEX)
- Decentralized Insurance Nexus Mutual
Maker token type
Maker has three tokens: stable coins Sai and Dai and its governance token Maker (MKR).
- Sai (SAI) is also called single mortgage Dai and is only backed by Ether (ETH) as collateral.
- Dai (DAI) was launched in November 2019 and is also known as multi-collateralized Dai. Dai is currently backed by Ether (ETH) and Attention Coin (BAT) as collateral, and plans to add other types of assets as collateral in the future.
- Maker (MKR) is the governance token of Maker, and users can use it to vote for improvements to the Maker platform through Maker improvement proposals. Maker belongs to a type of organization called Decentralized Autonomous Organization (DAO).
Description:
Sai is the single mortgage Dai initially launched by Maker, and Dai is a new type of multi-collateral Dai. Multi-collateral Dai will become the actual stablecoin standard maintained by Maker, and eventually Sai will be eliminated and no longer supported by Maker.
Mortgage Dai = Saidome Dai = Sai
Mortgage Dai = New Dai = Dai
Maker system governance
MKR holders have voting rights in this DAO organization that are proportional to the number of MKR tokens they hold, and can vote on the parameters of the governance Maker protocol. The parameters voted by MKR holders are critical to maintaining the health of their ecology, and ultimately help to ensure that Dai remains anchored to $1. Below are three key parameters.
I. Mortgage rate
The amount of Dai that can be minted depends on the mortgage rate.
Ether (ETH) mortgage rate = 150%
Attention coin (BAT) mortgage rate = 150%
Essentially, a 150% mortgage rate means that to mint 100 USD Dai, you need to mortgage at least USD 150 worth of ETH or BAT.
II. Stability Fee
The stability fee is equivalent to the "interest rate" that the borrower must pay in addition to the principal of the Maker's debt. As of February 2020, the stability fee is 8%.
III. Dai Deposit Rate (DSR)
Dai Deposit Rate (DSR) is the interest earned after holding Dai for a period of time. It also acts as a currency tool to influence Dai demand. As of February 2020, the Dai savings interest rate is 7.50%.
The scenario and purpose of issuing DAI
Seeing this, we may have questions, "Why would you lock in higher-value ETH or BAT to issue lower-value Dai instead of directly selling your crypto assets to get U.S. dollars?"
Here are three possible scenarios to explain this problem:
I. You need cash now and have a crypto asset that you believe will appreciate in the future.
● In this scenario, you can deposit your encrypted assets in the Maker vault and get funds immediately by issuing Dai.
II. You need cash now, but don't want to trigger the risk of a tax incident by selling crypto assets.
● You can withdraw loans by issuing Dai.
III. Investment Leverage
● In view of the belief that your encrypted assets will appreciate, you can increase leverage on your assets.
Dai's casting and trading
1. Casting Dai
Take a pawnshop as an analogy, and introduce how to cast Dai.
Suppose you need 10,000 yuan in cash one day, but you only have gold bars worth 15,000 yuan at home. Because you believe that the price of gold will rise in the future, you decide to go to the pawnshop to borrow 10,000 yuan in cash by collateralizing gold bars instead of realizing the gold bars. The pawnshop agrees to lend you 10,000 yuan, and the cash loan interest is 8%. Both parties sign a contract agreement to finalize the transaction.
| Bullion (collateral) |
Ether/Attention Coin (collateral-multi-collateral Dai) |
| Cash loan | Dai (DAI) |
| pawnshop | Maker |
| Contract agreement | Smart contract (treasury) |
| Lending rates | Stability fee |
Dai will be minted or "lent out" on the Maker platform by staking your Ether (ETH) or Attention Coin (BAT). When you want to redeem your ETH or BAT after the loan ends, you must repay your "loan" and "loan interest", which is the stability fee.
On the Maker platform (www.oasis.app), you can lend out Dai by depositing your ETH or BAT in the vault. Assuming the current value of ETH is 150 USD, then you can lock 1 ETH into the vault and get up to 100 DAI (100 USD) at a mortgage rate of 150%.
The amount you withdraw should not exceed the maximum amount of 100 DAI, but should leave some buffer for the decline in the price of ETH. It is recommended to reserve more space to ensure that your mortgage rate is always above 150%. This will ensure that your treasury will not be liquidated and will be charged a 13% liquidation penalty if the price of ETH drops (resulting in a decline in the mortgage rate)
2. Trade Dai
Once DAI is created, it can be sent anywhere. Some users may send their DAI to cryptocurrency exchanges, so you can also buy DAI from these secondary markets without minting them. The way to buy DAI in the secondary market is easier, because you don't have to lock in collateral, and you don't have to worry about mortgage rates and stability fees.
other instructions
1. Black Swan Incident
If the prices of ETH and BAT both drop significantly, an emergency shutdown will be triggered. Closing the system to liquidate the Maker platform is a process used as a last resort. This process is to ensure that Dai holders and Maker vault users get back the net assets they are entitled to.
2.maker decentralized features
Unlike most stablecoin platforms, Maker runs entirely on distributed ledgers. Therefore, Maker is born with the characteristics of the blockchain: security, immutability, and most importantly transparency. In addition, Maker's infrastructure strengthens the security of the system through comprehensive risk protocols and mechanisms based on real-time information.
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Original link: A preliminary study of MakerDAO