What is MakerDAO (DAI)?

Binance Academy · 2023-06-01T09:29:20.000Z

TL;DR MakerDAO is a Decentralized Finance (DeFi) project that uses the crypto-collateralized stablecoin DAI, pegged to the US dollar. Its community manages the currency through a Decentralized Autonomous Organization (DAO). Users generate DAI by locking cryptocurrencies in the Maker Vault and a Settlement Fee is determined. For example, a 125% Settlement Rate requires a crypto collateral value of $1.25 for every $1 of DAI. The stablecoin is overcollateralized to account for the cryptocurrency's volatile prices and is also charged a Stability Fee. If your collateral drops below the Liquidation Fee, your cryptocurrencies will be liquidated and used to cover losses.