What is Maker?

MakerDAO (now rebranding to Sky) is the decentralized protocol on Ethereum that issues DAI, a soft-pegged US-dollar stablecoin backed by a diverse basket of crypto and real-world assets rather than direct dollar reserves. Users open Collateralized Debt Positions (CDPs, now called Vaults) by locking approved collateral and minting DAI against it; the collateral is released when the DAI is repaid with a stability fee. MKR is the governance token whose holders control risk parameters and, as a last resort, can be diluted to recapitalize the protocol.

DAI maintains its peg through a system of economic incentives rather than direct convertibility: stability fees (interest rates on Vaults) and the Dai Savings Rate (DSR) are adjusted by governance to influence DAI supply and demand. When DAI trades above $1, it is profitable to open Vaults and sell DAI, increasing supply. When DAI trades below $1, closing Vaults to repay debt and earning DSR yield attracts demand. The peg has remained remarkably stable through multiple market cycles, including the March 2020 ETH price crash where flawed oracle mechanics temporarily created undercollateralized Vaults — resulting in the first protocol-level shortfall and an emergency MKR dilution to cover it.

The most significant evolution in Maker’s risk profile has been the deliberate inclusion of real-world assets (RWAs) as DAI collateral — including tokenized US Treasury bonds and loans to real-world businesses. By 2024, RWAs represented a majority of DAI’s collateral backing, generating substantial protocol revenue but introducing counterparty risk, regulatory risk, and centralization that crypto-native collateral does not carry. The Sky rebrand (announced 2024) introduced USDS as a successor stablecoin and SKY as a successor governance token with a migration path from DAI and MKR, aiming to expand the protocol’s product surface while managing regulatory positioning — a strategy that divided the community between supporters of decentralization purity and pragmatists who see RWA revenue as essential for protocol sustainability.

Reviewed by the 2Bitcoins Editorial Team · Updated June 2026. Not financial advice.