MakerDAO launched DAI in December 2017, making it the first truly decentralized stablecoin pegged to the US dollar. Founded by Rune Christensen, a Danish entrepreneur, Maker used a crypto-collateralized debt position (CDP) model: users locked ETH in a smart contract and minted DAI against it. If ETH fell, the position could be liquidated. The system was complex but it worked — DAI held its peg through the 2018 crypto winter when almost everything else collapsed.
Maker evolved over time. Multi-collateral DAI in 2019 added other assets beyond ETH. USDC was later accepted as collateral during the COVID crash, which was controversial because it partially centralized what was supposed to be a decentralized stablecoin. Real-world assets (treasuries, corporate bonds) were later added to back DAI, generating significant yield but further muddying the “decentralized” narrative. At its peak, DAI had a $10B+ market cap and was the backbone of dozens of DeFi protocols.
In 2024, Rune pushed through the Endgame plan — a sweeping rebrand that replaced DAI with USDS and MKR with SKY, introducing a tiered governance structure called SubDAOs. The community was bitterly divided. Some saw it as a necessary evolution. Others saw it as Rune concentrating power and abandoning the values that made Maker matter in the first place. Several prominent community members publicly exited over the changes.
Whatever one thinks of the Endgame plan, MakerDAO’s historical importance is secure. DAI proved that decentralized stablecoins could work. It survived multiple market crashes. It onboarded more users to DeFi than almost any other protocol. And it set the template for how algorithmic monetary systems could operate in a permissionless environment. Every subsequent stablecoin project — from LUSD to FRAX to USDe — owes a conceptual debt to Maker, even when they explicitly position themselves as alternatives to it.
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