Maker announced in august 2015 as a utility and governance token that works on Ethereum network (it means, it’s an ERC20 token). It was the first tradable token that could raise funds by issuing MKR tokens by Bitcoin and Ether using its own exchange. In fact, MKR is used to stabilize another cryptocurrency called DAI. DAI is a stablecoin which used through a dynamic system of Collateralized Debt Positions (CDPs). After the successful fund raising, finally, the Maker platform launched in April 2016.
What is Maker (MKR)?
Maker (MKR) is a project with two different tokens called MKR and DAI, created by Rune Christine in august 2015. It is based on the blockchain technology and is known to use of smart contracts ecosystem, which powers by Ethereum platform. It means that it’s an ERC20 token and cannot get mined. Maker created to solve the issue, which popular cryptocurrencies such Bitcon or ethereum are facing with. The issue is that their price is volatile and changes through the day and sometimes have dumps and pumps for more than 300% in a month. The DAI stablecoin is pegged to U.S dollar and it makes it an essential solution to realizing and using the full potential of blockchain technology. It could attract institutional investors and could raise multi-billion-dollars market cap just in a few weeks.
In fact, MKR created and burned in response to price fluctuations in the market in order to maintain its price stable. MKR is mostly used to execute payments on the Maker platform. Furthermore, the holders of Maker are able to vote upon to the platform in order to keep DAI pegged to the value of $1. It means that if the DAI fund cannot remain solvent, new MKR tokens are created to fund the DAI system. The voting system of the Maker platform, make the holders to be able to vote for the betterment of the entire platform, which makes a democratic and decentralized structure.
What is Maker use for?
Maker is a smart contract platform on Ethereum that backs and stabilizes the value of DAI through a dynamic system of Collateralized Debt Positions (CDPs), autonomous feedback mechanisms, and appropriately incentivized external actors.
Maker enables anyone to leverage their Ethereum assets to generate DAI on the Maker Platform. Once generated, DAI can use in the same manner as any other cryptocurrencies. It can freely send to others, used as payments for goods and services, or held as long term savings. Importantly, the generation of DAI also creates the components needed for a robust decentralized margin trading platform.
What is MKR and DAI?
The MKR used to pay for the transaction fees arising from the production of DAI within the platform. MKR could define as a utility token. The MKR token is burned when the payments are made, what reduces the total number of tokens. In case, the demand rises, DAI increases the number of MKR tokens.
Benefits of Maker token
- The maker is an ambitious project with various features. It aimed to develop a decentralized future for crypto coins.
- Maker is decentralized platform that aimed decentralized exchanges. A lot of well-known exchanges around the globe support it.
- It’s one the first ever DAO.
- It has two different tokens. Although both MKR and DAI are ERC20 token, they have different policies.
- Maker known to make use of CDP smart contracts. Its token called MKR maintains the stability of the DAI token at $1.
- MKR investors have the right to vote in the maker platform. They incentivized to run the platform. In fact, the MKR holders are the people who treated as the buyers of DAI token.