The Maker ecosystem contains two different type of crypto assets: 1) Dai –a crypto-backed stablecoin with a soft peg to the US Dollar, and 2) Maker (MKR) –the governance token of MakerDAO. MakerDAO is an Ethereum-based distributed autonomous organization (DAO) that issues the Dai stablecoin. A DAO is an organization that runs on a blockchain protocol fully and autonomously in accordance with rules encoded via smart contracts. MakerDAO is designed to keep the Dai price stable.
Dai can be created by posting alternative crypto assets such as Ether as collateral. By controlling the types of accepted collateral, collateralization ratios, and the interest rates for borrowing or storing Dai, MakerDAO is able to control the amount of Dai in circulation, and thus its value.
The Maker token acts as a governance token for MakerDAO. In addition, it also acts as a source of recapitalization when the MakerDAO runs at a deficit.
Maker is a pioneer in the decentralized finance (DeFi) movement going back to 2014.