Money 2.0 Stuff: Finding equilibrium

Trigger warning: today I am going to write about MakerDAO and for that I apologize in advance! 

MakerDAO is a credit facility and a synthetic dollar issuance platform. While the protocol targets a dollar peg, the price of Dai is subject to drift according to market forces. To this end, MakerDAO stakeholders adjust borrow rates, increasing the cost to borrow when Dai drifts below $1 and contracting interest rates when Dai moves above. Put differently, MakerDAO serves as the Dai central bank, leveraging monetary policy tools to achieve its targets.