The Maker network is a decentralized finance (DeFi) platform built on the Ethereum blockchain that allows users to create and manage stablecoins, which are cryptocurrencies designed to maintain a stable value relative to a specific asset or currency. The Maker platform operates using a system of smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.
The stablecoin created and managed by Maker is called Dai, which is pegged to the US dollar and backed by collateral in the form of other cryptocurrencies, such as Ethereum. The Maker network allows users to deposit their Ethereum or other supported cryptocurrencies as collateral, and then create Dai stablecoins based on the value of their collateral. Users can then use Dai for transactions or as a store of value without the price volatility typically associated with other cryptocurrencies.
The Maker platform also has a governance system, where holders of its native cryptocurrency, MKR, can participate in decision-making and risk management. MKR holders can vote on important decisions such as the stability fee, which is the interest rate that Dai borrowers must pay on their loans.
The Maker network is designed to be decentralized, transparent, and open to anyone with an internet connection. It offers a unique solution to the problem of price volatility in cryptocurrencies by creating a stablecoin that is backed by collateral and can be used for a variety of purposes, such as payments, remittances, and savings.