A tiny project called MakerDao, launched in 2015 on the Ethereum blockchain, evolved into one of the most successful and widely used protocols with its stablecoin Dai. BTCMEX explains.
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MakerDao is a lending facility powered by smart contracts function on ERC-20, where Ether serves as a collateral to get Dai. To overcome the volatility issue, Dai mirrors the US dollar’s value.
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The difference between MakerDao and other digital lending projects is in its decentralized nature. Lending projects usually have a company that handles the overall lending process, ensuring that a stablecoin value is pegged against a fiat currency, while with the smart contracts system Dai is governed by the blockchain itself. Let’s take a deeper look at the mechanics of the Dai market.
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Please, note, that the article is a part of BTCMEX Blog, the views and opinions expressed here are the contributing author’s only, and do not necessarily represent the views of the company.
Julia Bulakh for BTCMEX