MakerDAO

MakerDAO is one of the key participants of today’s defi field. Their story kicked off in 2015, with the first introduction of their native stablecoin $DAI.

MakerDAO allows the user to obtain Collateralized Debt Position (CDP) loans, also called Vaults, by minting (generating) DAI against a deposit of ETH (the collateral type can vary, and they are to be decided on by governance). The amount of assets you deposit as collateral must be over-collateralized in it’s value, with the current minimum coll. ratio of 145%.

Example: By depositing 20 ETH (~$31,064) as your collateral, the Max amount of Debt that you can take out is 21,424 DAI, and that brings you to a coll.ratio of 145%. But, being that it’s the minimum percentage, you would easily get liquidated so a recommendation would always be to go over 195% coll. ratio which means you would take out only 16,090 DAI against your 31k collateral value, for your position to remain more safe.

Maker requires a (current) minimum debt of 7.500 DAI for the position to even be created. And supports collateral types: ETH, WSETH, RETH, WBTC, RENBTC, MANA, GUSD and GNO.

All operations inside the protocol are operated automatically by smart contracts. That implies also on their mechanism of keeping the value of DAI fastened to the value of a dollar by minting and burning DAI when debts are paid back. Maker does not contain any liquidity/supply pools.

When it comes to Oracles and how Maker obtains data and information, it’s good to know that they have their own, and they also posses an OSM (Oracle Security Module) that delays price updates by 1h, reducing the risk of unforeseen crashes. This is also decided by governance, and can be eligible to change. So it’s advisable to keep track of their updates and news.