{% hint style="warning" %} This documentation describes certain core aspects of MakerDAO's protocol that could change over time. Be aware that parts may be inaccurate or out of date. {% endhint %}

# MakerDAO

MakerDAO is a decentralized entity dedicated to bringing stability to the cryptocurrency economy. Established in 2014, MakerDAO operates as an open-source project on the Ethereum blockchain, functioning as a Decentralized Autonomous Organization (DAO). The platform utilizes the Maker protocol to generate Dai, a stablecoin backed by collateral assets approved through its governance.

Governance within the MakerDAO protocol revolves around the MKR token, which provides voting rights to its holders for system changes. This approach ensures transparency, responsiveness to emergencies, community-driven development, and the ongoing growth of MakerDAO, empowering users to collectively steer the protocol's direction and maintain the stability and integrity of the ecosystem.

On-Chain voting takes place in [Maker's Governance Portal](https://vote.makerdao.com/), a platform that constitutes a core component of MakerDAO's decentralized governance system. MKR holders can use their voting rights to ratify crucial protocol changes. They can also [delegate](https://manual.makerdao.com/delegation/overview) their MKR to a Delegate that aligns with their vision for the protocol.

**MakerDAO's key components include:**

- MKR token & Governance Voting
- Dai stablecoin
- Maker Collateral Vaults
- Oracles

The [MKR token](https://github.com/makerdao/intro-docs/overview/mkr.md) plays a critical role in managing the system, facilitating activities such as Executive Voting and ensuring stability, transparency, and efficiency within the protocol. Voting power is proportional to the number of MKR tokens held by a user.

[Dai](https://github.com/makerdao/intro-docs/overview/dai.md) serves as a stablecoin, soft pegged to the US Dollar, functioning as a virtual equivalent to actual money; it acts as a store of value, medium of exchange, standard of deferred payments, and unit of account.

[Maker Vaults](https://github.com/makerdao/intro-docs/overview/vaults.md) represent smart contracts within the Maker protocol, enabling the holding and collateralization of assets. 

[Oracles](https://docs.makerdao.com/smart-contract-modules/oracle-module) are a critical component of the Maker Protocol that provides reliable price data to ensure the stability and accuracy of Dai. These oracles fetch real-time data from external sources and feed it into the smart contracts, enabling the system to make informed decisions and maintain the peg to the US Dollar.