David Stancel
Cryptocurrency Expert, Advisor, Lecturer, Author, & exCTO @ Fumbi
by David Stancel, MSc.
MakerDAO is a decentralized credit platform on Ethereum that supports Dai, a stablecoin whose value is pegged to USD. Anyone can use Maker to open a Vault, lock in collateral such as ETH , and generate Dai as debt against that collateral. Dai debt incurs a stability fee (i.e., continuously accruing interest), which is paid upon repayment of borrowed Dai.
Holders of Maker’s other token (MKR) govern the system by voting on, e.g., risk parameters such as the stability fee level. MKR holders also act as the last line of defense in case of a black swan event. If the system-wide collateral value falls too low too fast, MKR is minted and sold on the open market to raise more collateral, diluting MKR holders.
1. Deposit ETH to Metamask
2. Wrap ETH --> WETH (via Dai.makerdao.com)
3.Exchange it for PETH (pool eth), used for collateral
4. Create CDP (the loan)
5. Lock your PETH collateral
6. Mint new DAI (max. 60% of collateral)
7. Exchange DAI for ETH at Oasis DEX
8. Send ETH to any exchange and get EUR, BTC etc.
1. Get some ETH
2. Exchange it for DAI (which you owe) and MKR (for governance fee) on Oasis DEX
3. Return DAI to the smart contract and pay the fee in MKR
4. You cancel CDP smart contract
5. Unlock your PETH
6. Exchange PETH for WETH
7. Unwrap WETH --> ETH
8. You have your ETH back
Aave is an open-source non-custodial protocol on Ethereum for decentralized lending and borrowing.
Users can borrow against most supplied assets; the collateralization ratio and liquidation threshold depend on the asset. Interest rates adjust algorithmically based on supply and demand, but Aave lets borrowers opt in to and out of (at any time) a stable rate that changes less often. The protocol keeps a liquidity reserve to ensure withdrawal at any time.
By David Stancel
Capgemini Seminar
Cryptocurrency Expert, Advisor, Lecturer, Author, & exCTO @ Fumbi