Yes, MakerDAO is built on Ethereum. Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference.
MakerDAO is a decentralized autonomous organization on Ethereum that creates and governs the Dai stablecoin, the first decentralized stablecoin on the Ethereum blockchain. The Dai stablecoin is backed by collateral and held in a decentralized smart contract platform, which ensures it remains stable in price.
The Maker Foundation is responsible for governance and maintaining the stability of the Dai stablecoin. The Foundation accomplishes this through the Maker Protocol, a set of smart contracts that interact with each other to stabilize the price of Dai.
NOTE: Warning: MakerDAO is built on Ethereum, however there are certain risks associated with using a decentralized platform as the underlying technology. These risks include (but are not limited to) network latency, transaction costs, and the potential for malicious actors to exploit weaknesses in the blockchain. Users should be aware of these risks before investing or using MakerDAO.
The Maker Protocol is open source and anyone can contribute to its development. The Maker Foundation incentivizes participation in the protocol through MKR, a token that gives holders voting rights in the governance of the protocol and rewards them for maintaining stability.
The Dai stablecoin is an important step forward in the development of decentralized finance (DeFi), which is a financial system built on Ethereum that enables anyone to access financial services without the need for intermediaries.
The Dai stablecoin allows users to avoid the volatility of cryptocurrencies like ETH and BTC, which makes it an ideal currency for everyday use. In addition, because Dai is backed by collateral, it can be used in lending protocols and other DeFi applications.
The Maker Protocol and Dai stablecoin are important building blocks in the development of the Ethereum ecosystem and the DeFi space. By providing a stablecoin that is backed by collateral and governed by a decentralized organization, MakerDAO is laying the foundation for a more inclusive financial system that anyone can access.
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As the first decentralized autonomous organization on Ethereum, MakerDAO has set out to provide collateralized debt positions (CDPs) to users who wish to take out loans in Dai, the organization’s stablecoin. In order to do this, MakerDAO locks up ETH as collateral in a smart contract, which can then be used to generate Dai. The Dai that is generated is pegged to the US Dollar, meaning that it retains its value even if the price of ETH falls.
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