MakerDAO is the DeFi protocol behind DAI, the first major decentralised stablecoin — a dollar-pegged token generated by locking collateral (ETH, USDC, real-world assets) in smart contract vaults. Founded by Rune Christensen in 2014 and launched on Ethereum in 2017, Maker invented the CDP (Collateralised Debt Position) model that underpins much of DeFi lending. Users lock collateral worth more than the DAI they mint, maintaining a minimum collateralisation ratio; if collateral drops below the threshold, the vault is automatically liquidated. MKR is the governance token: holders vote on risk parameters, approved collateral types, stability fees, and major protocol decisions. MKR is also a lender of last resort — if the system runs a deficit, new MKR is minted and sold to cover it, diluting holders. In 2023, MakerDAO launched an ambitious rebrand as ‘Sky,’ splitting into multiple sub-DAOs, introducing the USDS stablecoin (upgraded DAI), and renaming MKR to SKY. The protocol has expanded its collateral base substantially into real-world assets (US Treasury Bills, real estate loans) via entities like Monetalis and Centrifuge, generating significant yield for the protocol. Maker/Sky remains one of DeFi’s most important and influential protocols.
Example: A user wants to stay long ETH but needs $10,000 for a business expense. They open a Maker Vault, lock $20,000 of ETH (200% collateralisation), and mint 10,000 DAI. The DAI is spent; when ETH rises later, they buy DAI back cheaper and repay the vault, reclaiming their ETH at a profit. The stability fee (interest) was 5% annually — far cheaper than a personal loan.
Learn more: Sky.money (formerly MakerDAO)
