MakerDAO is a decentralized credit platform that launched on Ethereum in 2017. Maker allows users to generate the stablecoin, DAI, by using their crypto holdings as collateral. DAI aims to maintain a 1:1 peg with the US dollar, and it does this through a system of smart contracts and collateralized debt positions (CDPs).

Users deposit assets into CDPs to generate DAI, which can then be used or traded like any other ERC-20 token. When users want to retrieve their collateral, they repay the DAI amount along with a stability fee. The stability fee is essentially the interest accrued over the time DAI is borrowed and is paid in Maker (MKR), MakerDAO's governance token.

MKR holders are responsible for governing the MakerDAO system. They vote on proposals, including adjustments to collateral types, risk parameters, and the stability fee rate. This decentralized governance structure ensures that the system remains adaptive to market conditions.

If the value of collateral in the system drops significantly, MKR is automatically sold on the open market to raise the necessary funds to ensure that all DAI remains fully collateralized. This mechanism acts as a safeguard against market crashes and ensures DAI's stability.

MakerDAO has undergone rigorous security reviews by Trail of Bits, PeckShield, and Runtime Verification. The protocol maintains a robust risk management framework. MakerDAO also runs a bug bounty program to detect and address potential vulnerabilities.

OUSD's Maker strategy uses the DAI Savings Rate (DSR) which allows DAI holders to earn savings automatically and natively by locking their DAI into the DSR contract. This savings rate is generated by other users accruing interest on their debt positions. The strategy posses no additional risk to holding DAI, according to MakerDAO's founder Rune Christensen.

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