Glossary of Terms

Notice: You are reading the Single-Collateral Dai version of this Glossary. For the up-to-date version, visit the MCD Glossary.

A

B

Bite

  • the action of triggering a CDPs liquidation

Boom/Bust Spread

  • Discount/premium at which the system sells collateral PETH for DAI

Burn

  • the process of destroying MKR that are paid as stability fees

Burner Address

  • the public Ethereum address that escrows MKR prior to burning

C

CDP Portal

  • a front-end application with which you can interact with your CDP

CDP

  • Collateralized Debt Position, a collateral position holding locked Ethereum administered by a smart contract system

Collateral Claims

  • the amount of redeemable collateral Dai holders and CDP owners have claim to in the event of an Emergency Shutdown

Collateral

  • assets locked in a CDP

Collateralization Ratio

  • the ratio between a CDPs collateral and the Dai issued by that CDP

Continuous Approval Voting

  • a voting design that involves leaving your vote in the previous proposal

D

Dai Credit System

  • a name for the MakerDAO smart contract system

Dai

  • USD pegged decentralized stablecoin of the Dai Credit System

Debt Ceiling:

  • the maximum amount of Dai that can be generated in the Dai Credit System

Debt:

  • the amount of Dai generated through a CDP

Decentralized Risk Management

  • the cooperative interaction between Maker Token Holders and all Risk Teams to manage risks in MakerDAO

Development Fund

  • another name for the Maker Foundation’s multisig wallet that contains MKR, which is sold for operational expenses

Draw

  • the action of generating Dai from a CDP

E

Emergency Shutdown

  • a security feature that allows the system to shut down and make underlying collateral available for redemption

Executive Vote

  • a continuous approval vote that executes changes in the system if passed

F

Free

  • the action of releasing collateral from a CDP

G

Give

  • the action of transferring CDP ownership to a different Ethereum address

Governance Poll

  • a time-based vote to gather soft consensus

Governance Portal

  • a front-end application that allows you to interact with MakerDAOs on-chain governance

H

I

J

Join/Exit Spread

  • a system parameter that represents a discount or premium for converting between ETH and PETH

K

Keeper

  • external actors who perform various functions in the system

L

Liquidation Penalty

  • a penalty fee that's applied to a CDPs Dai balance when it is liquidated

Liquidation Price

  • lowest price per unit of collateral before a CDP is vulnerable to liquidation

Liquidation Ratio

  • a risk parameter defining the minimum Collateralization Ratio below which a CDP is vulnerable to liquidation

Liquidation

  • automatic sale of a CDPs collateral to cover its outstanding Dai

Liquidity Providing Contract

  • a smart contract which facilitates collateral sales

Lock

  • the action of placing collateral into your CDP

M

Maker Foundation Interim Risk Team

  • the first Risk Team whose role is to help bootstrap the Decentralized Risk Management function

Maker Foundation

  • the organization that created to develop and bootstrap the Dai Credit System

Market-Maker

  • an agent that provides liquidity to a market by offering to both buy and sell a given asset.

MCD

  • acronym for Multi Collateral Dai

Medianizer

  • the smart contract that collects price feed information from Price-Feed Providers and publishes a reference price for each asset

MKR

  • governance token of MakerDAO

Multi Collateral Dai

  • the upgraded Dai Credit System that utilizes multiple collateral types

N

O

Oracle Security Module

  • a security mechanism that delays the Oracle price feed

Oracle

  • a smart contract system which makes off-chain data, such as price data, available on-chain

P

PETH

  • a token representing pooled ether

Price-Feed Delay

  • a risk parameter that controls the delay of the Oracle price feed

Price-Feed Provider

  • operator of an Oracle that reports price data to the Medianizer

Proposal

  • a written plan put forward for a vote

Q

R

Reference Price

  • the authoritative asset price published by the Medianizer

Risk Construct

  • a collection of data, risk models, outputs, documentation, and analysis

Risk Model

  • an analytical model measuring and predicting risk, including the input data and output of the model

Risk Parameters

  • a set of configurable, risk-related, variables used to manage the system

Risk Team

  • an independent party who creates a Risk Construct for Maker Governance

S

SCD

  • acronym for Single Collateral Dai

Shut

  • action of closing a CDP by paying back outstanding Dai and the Stability Fee

Single Collateral Dai

  • the Dai Credit System which solely accepts ETH as collateral

Soft-peg

  • relating the target value of a cryptocurrency to the absolute value of a fiat currency, allowing for some variance

Stability Debt:

  • the amount of Dai generated through a CDP

Stability Fee

  • a variable Fee charged to a CDP for the creation and use of Dai, set by MKR holders through governance actions

T

Time-Based Voting

  • a voting design that ends a vote at a predetermined time

U

V

Voting Proxy

  • a smart contract that allows MKR token holders to vote with their hot wallets using MKR that is stored on their cold wallets

W

WETH

  • ERC-20 compatible ETH

Wipe

  • action of paying back Dai to a CDP

X

Y

Z