Last Updated: March 2026
MakerDAO is the protocol behind DAI — the largest decentralized stablecoin. It lets users deposit crypto as collateral and mint DAI, creating a decentralized lending system without banks. MKR is the governance token.
History and Founders
Founded by Rune Christensen in 2014 — one of the oldest DeFi protocols. MakerDAO pioneered the concept of crypto-backed stablecoins. DAI launched in 2017 and has maintained its $1 peg through multiple market crashes including the 2020 “Black Thursday” crisis. Rebranding to “Sky Protocol” began in 2024. See stablecoin guide.
How Maker Works
- Deposit collateral (ETH, WBTC, stablecoins, RWAs) into a Maker Vault
- Borrow DAI against your collateral (typically 150%+ collateralization required)
- Pay a stability fee (interest rate) set by MKR governance
- If collateral value drops below the threshold, it gets liquidated to protect the system
See DeFi guide and lending guide.
Tokenomics
MKR: ~900K total supply (deflationary — surplus revenue buys and burns MKR). DAI: Minted/burned based on demand. Revenue: Maker generates $100M+ annual revenue from stability fees. See tokenomics and burn guide.
Why Maker Matters
- DAI: Most trusted decentralized stablecoin — no single company controls it
- Real revenue: One of the highest-revenue DeFi protocols
- RWA integration: Maker holds US Treasuries and real-world assets as collateral — bridging TradFi and DeFi
Pros and Cons
- Pro: Oldest, most battle-tested DeFi protocol (since 2017)
- Pro: Real revenue — $100M+ annually from stability fees
- Pro: MKR is deflationary (surplus buys and burns tokens)
- Pro: DAI maintained peg through every market crisis
- Con: Sky rebranding has created confusion
- Con: RWA exposure introduces traditional counterparty risk
- Con: Complex governance process can be slow
Frequently Asked Questions
Is DAI safe?
DAI has maintained its peg since 2017 through multiple crashes. Over-collateralization and liquidation mechanisms protect the peg. The main risk is a simultaneous crash in all collateral types. See stablecoin guide.
Is MKR a good investment?
MKR is one of few DeFi tokens with real, significant revenue and a deflationary burn mechanism. Considered a DeFi blue chip. See DeFi projects and long-term picks.
