How does MakerDAO handle real world assets?

3 answers

• Dec 25, 2021 · 3 years ago
  MakerDAO is a decentralized autonomous organization (DAO) that operates on the Ethereum blockchain. It allows users to generate a stablecoin called Dai by locking up collateral in the form of cryptocurrencies. However, MakerDAO does not directly handle real world assets. Instead, it relies on the value of the collateral to maintain the stability of Dai. If the value of the collateral drops below a certain threshold, users may be required to add more collateral or risk having their collateral liquidated. This ensures that Dai remains backed by sufficient value, even though it is not directly tied to real world assets.
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• Dec 25, 2021 · 3 years ago
  MakerDAO doesn't handle real world assets itself. Instead, it relies on the collateral provided by users to back the Dai stablecoin. This collateral can be in the form of cryptocurrencies such as Ethereum or BAT. The value of the collateral is monitored by an oracle, which is a trusted source of price information. If the value of the collateral drops below a certain threshold, the system automatically triggers a liquidation process to protect the stability of Dai. This approach allows MakerDAO to handle real world assets indirectly through the use of cryptocurrency collateral.
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• Dec 25, 2021 · 3 years ago
  As an expert in the field, I can tell you that MakerDAO does not directly handle real world assets. Instead, it operates as a decentralized platform that relies on collateralized debt positions (CDPs) to generate Dai. Users lock up their cryptocurrencies as collateral, and based on the value of the collateral, they can generate Dai. The system is designed to maintain the stability of Dai by ensuring that the value of the collateral is always higher than the amount of Dai generated. This approach eliminates the need for MakerDAO to handle real world assets, as the value of the collateral serves as the underlying support for Dai.
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