MakerDAO is a decentralized organization built on an Ethereum blockchain created to allow for the lending and borrowing of cryptocurrencies without requiring a middle man like a bank or investment firm. 2 native tokens power the system: MKR and DAI. DAI is a ERC20 Token that aims to keep its value as close to one US Dollar per token as possible. It is key to the MakerDAO lending system and when a loan is taken out on MakerDAO, more DAI is created. DAI's value is not backed by the U.S. Dollar itself, but by other cryptocurrencies as collateral. Meanwhile, MKR is the currency that allows holders of said currency to vote on how the MakerDAO system is run. Each MKR token you have equals one vote when voting on MakerDAO policies and a stability fee is used to guarantee that DAI remains as close to $1 as possible by regulating how much DAI and MKR is in circulation. This system helps to protect the currency from forces like hyperinflation and allow people to consistency know what the value of the native cryptocurrencies on the system are.
To get involved with MakerDAO and this new financial ecosystem, all you need is a cryptowallet and some crypto 'collateral' in order to purchase MKR or DAI. In addition to ETH, cryptocurrencies like the Basic Attention Token or BAT can be accepted as collateral.
