5 Minutes to Understand BakerDAO（June 20,2021）
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BakerDAO is an upgraded version of MakerDAO protocol on Binance Smart Chain(BSC) run by different community. It is a multi-collateral decentralized stablecoin borrow system on BSC, which allow users to borrow decentralized stablecoin BAI by leveraging collateral assets like BNB, BUSD, ETH, BTC and so on. Excess collateral, self-balance system, liquidators and other ecosystem participants ensure that 1 BAI is soft-pegged to 1 USD. In addition, BakerDAO is non-custodial and completely decentralized, in which all processes are completed based on smart contracts on BSC. No one is entitled to use collateral assets or issue BAI and BKR arbitrarily.
BAI is a decentralized, unbiased, collateral-backed and stable currency issued by the BakerDAO system according to the borrow protocol, which is soft-pegged to the US dollar. With very low volatility, BAI can resist hyperinflation, ensure economic freedom and provide opportunities for anyone anywhere.
BKR is the decentralized governance token of BakerDAO, and its holders can use it to initiate proposals and vote to govern the major events or decide development directions for BakerDAO. For instance, the holders can modify such parameters as the stable fee rate and liquidation rate of collaterals, and they also have options for what type of new collaterals to support.
Besides, BakerDAO is a decentralized stablecoin as well as a safe and reliable decentralized borrow protocol. Currently, the amount of stablecoin DAI of MakerDAO on Ethereum has reached nearly 5 billion US dollars, which are all issued through collateral cryptocurrency, and the marketcap of the governance currency MKR market cap has also reached nearly 5 billion US dollars. MakerDAO is the most complicated and largest decentralized application in the DeFi world so far. BakerDAO will certainly make another splendid achievement with its enormous market potential by relying on the high efficiency and low gas fee of the BSC chain and the innovative economic model.
1 million BakerDAO governance token BKR will be issued, 70% of which will be issued in a fair manner, namely, yield farming. Stimulated by yield farming, more users can obtain BKR, so as to participate in the governance of BakerDAO. The distribution method is as follows:
Distribution | Percentage | Description |
Team | 17.5% | Release with yield farming. |
Ecosystem | 10% | Support for ecosystem, used for early project governance. |
Early Investor | 2.5% | |
Yield Farming | 70% |
It is well-known that the BAI ecosystem is a key marker for the BakerDAO development, so BakerDAO reserves 10% of BKR to support ecosystem projects. These projects will not be supported directly by BKR to prevent the fluctuation of BKR price. Instead, they will be supported in the following two ways:
l BAI is repurchased using BKR to support the ecosystem projects;
l BKR mining is conducted to support the ecosystem projects’ cryptocurrency.
In turn, the ecosystem projects need to airdrop a certain percentage of tokens to BKR holders to give feedback for this support.
The ecosystem projects planned by BakerDAO include stablecoin trading protocols, borrow protocols and decentralized exchanges. The ecosystem will continue to grow as BakerDAO progresses. The ecosystem projects can be existing projects or new ones.
To better develop the Baker protocol, we will develop the BAI ecosystem, initiate governance, provide more collaterals and increase capital utilization in addition to optimizing the user’s experience on BakerDAO. The development roadmap is shown below:
l The stablecoin BAI generation protocol will be launched on June 16, 2021
l BKR yield farming will be launched on June 18, 2021
l The ecosystem project, Stablecoin Exchange Protocol, will be supported on July 18, 2021.
l BakerDAO will start governance by BKR on July 28, 2021
l The ecosystem project, Decentralized Lending Protocol, will be supported on August 18, 2021
l BakerDAO liquidation system will be upgraded on September 1, 2021
l The ecosystem project, Decentralized Exchange Protocol, will be supported on October 18, 2021
l NFT assets will be supported to generate BAI on January 1, 2022
l The utilization of collaterals will be increased using the re-collateral model on April 1, 2022
l Physical assets will be supported to generate BAI on July 1, 2022
l BAI interest system will be adopted to improve the utilization of BakerDAO system revenue on October 1, 2022
For more information, please refer to BakerDAO white paper:
BakerDAO Whitepaper V1.0
