Maker is completely transparent about development of its blockchain project. MakerDAO creates DAI using CDP smart contracts to collateralize the assets. This means it’s backed by ETH instead of fiat currency, and the CDPs ensure there’s always enough ETH assets on hand to cover the DAI supply. Essentially, CDP contracts hold ETH, and if a black swan event occurs, such as ETH crashing before anyone has a chance to react, MKR is liquidated on the open market to cover the losses.
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