What is lye commonly used for?

Lye is used in many industries, like candle making and making Bio-Diesel.
In Soap Making: Lye is mixed with water to create a lye solution. The lye solution, when then mixed with fats and oils, will cause a chemical reaction called saponification (fancy for soap). The result of saponification is beautiful handmade soap. This is how soap has been made for thousands of years and you can still buy it in specialty shops and farmer’s markets. 
In Cleaning: Industrial, or technical, grade lye is often used as a cleaner and is the active ingredient in common household drain cleaners and oven cleaners.
In Food Prep: Food uses of sodium hydroxide include washing or chemical peeling of fruits and vegetables, chocolate and cocoa processing, caramel coloring production, poultry scalding, soft drink processing, and thickening ice cream. Olives are often soaked in sodium hydroxide for softening; Pretzels and German lye rolls are glazed with a sodium hydroxide solution before baking to make them crisp.
The point is that most households already use lye directly or indirectly without even knowing it.