How To Use MakerDAO: A Step-by-step Guide

Publish by Quang Phan at 05 October 2021

If you have been diving in the DeFi market for a while, you must have heard or known about MakerDAO & DAI. DAI is now widely used by DeFi users, mainly for its “decentralized” property and low-risk implementation.

Hence, using and experiencing MakerDAO can give users plenty of insightful knowledge. This article will guide you on how to use MakerDAO and its features.

MakerDAO Overview

MakerDAO is one of the largest lending protocols at the moment. By depositing any Ethereum-based assets, users can mint the DAI stablecoin token through a unique smart contract known as Collateralized Debt Positions (CDPs).

MakerDAO aims to provide a decentralized, permissionless, and unbiased money market. Its vision is to replace the original centralized financial system with a DAO (Decentralized autonomous organization). To some extent, MakerDAO has accomplished that ideology in both aspects.

Some notable points before using MakerDAO

  • Currently, to open a vault on MakerDAO, you have to use a third-party application like Oasis.
  • DAI is currently the number one decentralized stablecoin, with more than 6.6B DAI circulating on the market. Therefore, you can be assured that using MakerDAO and DAI will be extremely safe.
  • MakerDAO has been audited by Trail of Bits (smart contracts audit), PeckShield (traditional audit), Runtime Verification (logic audit).
  • You have to check all the important details before opening a Maker Vault, such as: Stability Fee (Interest Fee), Liquidation Fee, Minimum Collateral Ratio, Dust Limit (Debt Floor).

Preparation for trading on MakerDAO

What are the prerequisites for trading on MakerDAO?

First, users need to download and create an account (optional) on Coin98 Wallet.

Coin98 Mobile Wallet version X is available for download at:

Read the detailed instruction on how to use Coin98 Wallet or watch the tutorial video below to install the Coin98 Mobile Wallet:

Coin98 Extension: Follow these steps to install the Coin98 Extension Wallet on Chrome:

Step 1: Find and select Coin98 Extension Wallet on Chrome Web Store;

Step 2: Click Add to Chrome;

Step 3: A pop-up notification will be displayed on the screen, please read it carefully. To approve, click Add extension.

Step 4: To use the extension, click the extension icon to the right of the address bar. If the Coin98 Extension Wallet shows up in the drop-down menu, it has been installed and enabled successfully.

How to create an Ethereum wallet on Coin98 Wallet?

Before using MakerDAO, users need to create an Ethereum wallet. Users can create a new Ethereum wallet on Coin98 Wallet or import an existing Ethereum wallet from other wallets to Coin98 Wallet. Creating a Multi-chain wallet on Coin98 Wallet will also include an Ethereum sub-wallet.

For you: How to create Multichain wallet

Preparing ETH as gas fee

MakerDAO uses ETH for gas fee. Therefore, in order to trade on MakerDAO, users must have ETH in their wallets. Users can buy ETH on a centralized exchange such as Binance, FTX, Gate,... and send it to the Ethereum wallet address on Coin98 Wallet.

How to use MakerDAO with Coin98 Extension Wallet

Connect the Coin98 Extension Wallet to MakerDAO

Step 1: Go to the Oasis website here: https://oasis.app/

Step 2: Click “Connect Wallet” at the top-right corner to connect to Coin98 Extension Wallet.

Step 3: Choose “Metamask”. Enter your Coin98 Extension Wallet password if needed.

Ensure that your wallet prioritizes Ethereum. Open the Coin98 Extension Wallet and change the Web3 Priority if needed.

Open Vault

Step 1: Find the asset you want to supply with a suitable Stability Fee and Minimum Collateral Ratio. I’ll take ETH-A as an example. Click “Open Vault”.

Step 2: There are two available choices: You can either borrow more of your asset (multiply ETH) or borrow the stablecoin DAI (borrow against ETH). I’ll choose the latter option as an example. Click “Borrow against ETH”.

Step 3: If you are using Oasis for the first time, you have to sign a message with Coin98 Wallet to continue. Click “Sign message”.

Step 4: Click “Sign”.

Step 5: Before using Oasis, you have to confirm that you have read and accepted their Terms of Service. Tick the checkbox and click “Continue”.

Step 6: Enter the amount of asset that you would like to deposit. Check all the details, then click “Setup Proxy”.

Step 7: Click “Create Proxy”.

You have successfully opened a vault on MakerDAO.

Now that you have deposited your collateral, you can borrow every available token on MakerDAO.

How to use MakerDAO on the Coin98 Wallet dApp browser

Currently, you can open a Maker Vault by using InstaDapp.

Step 1: Open the Coin98 Mobile Wallet. Select “Browser”.

Step 2: Search “InstaDapp”.

Step 3: At the main screen, click the “Hamburger Menu Icon” at the top right corner.

Step 4: Select “Maker”.

Step 5: Click “Supply”.

Step 6: Select an asset that you want to deposit, considering their Stability Fee and Liquidation Fee.

Step 7: Enter the amount and check all the details, then click “Supply”.

Step 8: Afterwards, you can borrow DAI by clicking “Borrow”.

FAQ about MakerDAO

How much should I borrow?

To avoid liquidation, you should borrow only a reasonable amount. Depending on the assets that you are borrowing, there will be different Liquidation Ratios and Collateral Ratios. I recommend that you keep the Liquidation Price at about 50% (for normal tokens) and 60-65% (for stablecoins) of that asset’s market value. This is a pretty safe threshold to borrow assets.

For example: If I borrow Aave (a normal token) at $280, I will adjust the amount of Aave I borrow so that its Liquidation Price will be around $140 (50%).

However, remember that this number should only be treated as an advisable standard. You should adjust the amount based on the assets you are borrowing and the assets you are collateralizing, considering its price fluctuation and price spread.

How much can I earn by lending/supplying?

Depending on the protocol you are using and the asset you are depositing, the APY will be different.

Do remember that the APR (APY) you earn by lending is usually much lower than that by farming/staking. Conventionally, the APR on lending protocols ranges from 1% to 3%.

You should check all possible yields on different platforms and protocols to make the most profitable decision.

Do I have to lock my assets when lending/supplying?

No, you don’t. You can withdraw your assets anytime you want, given that you are not borrowing any assets and/or having any debt.

How much do I have to pay after borrowing?

The borrowing fee varies depending on the assets you are borrowing, and the application you are using. Although some assets are supported with a 0 borrowing fee, the number usually ranges from 5-7%.

You can pay this fee in multiple assets based on the list that the protocol supports.


And that is all you need to know in order to use MakerDAO. Hopefully, this article can effectively support users in using MakerDAO with the Coin98 Mobile Wallet and the Coin98 Extension Wallet.

If there are any questions, please feel free to comment below or join Coin98 Community for further discussions about Crypto!

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Quang Phan

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