MakerDAO could be the best tokens fusion on the crypto world?
Well, let’s start!
First of all give me a minute to introduce you my new format. So, what mean E&S?
E&S mean: Easy and Short. Why did I choose to create this format?
I chose to start this format because I strongly believe in the potential of this sector and I wanted to create an accessible and understandable section, even for beginners, where I will analyze different tokens on the market, summarizing all the most useful information.
But now let's talk about MakerDAO!
Read until the end to find out how I will manage this new format!
We have to take a step back 6 years, when in 2014, two guys named Rune Christensen and Andy Milenius created Maker. They understood that the crypto Community needed a stable cryptocurrency without losing the decentralization of the system.
Maker (MKR) was then launched in 2018, after almost 4 years of work and development.
The project did not collect funds with an ICO. The tokens were distributed with a private sale to all those who understood and believed in the project. Maker's total supply is 1 million MKR and currently all tokens are in circulation.
Having births as a stable-coin MakerDAO is another decentralized organization dedicated to bring stability to the cryptocurrency economy.
The Maker Protocol employs a two-tokens system:
The first token is DAI, a collateral-backed stable coin that offers stability.
Dai is a hybrid stablecoin that relies on a complex mix of underlying assents, automated mechanism and external actors to achieve price stability.
Each Dai is backed by Ether held in MakerDAO smart contracts. These contracts are called Collateral Debt Positions (CDP). Anyone can lock up Ether in CDPs and new Dai will be released to the user in exchange for locking up the necessary collateral.
The second is MKR, a governance token that is used by stakeholders to maintain the system and manage DAI.
Holders can vote on proposals submitted by any Ethereum account interested in submitting a proposal to the MakerDAO system. Proposals are smart contracts submitted to the Maker platform which aims to modify the internal governance and operational variables of the Maker Platform.
We can use MKR also to pay interest payments that users have created on the Collateralized Debt Position. These payments are known on Maker as “stability fees” .
The Maker Protocol can be used by anyone, anywhere, without any restrictions or personal-information requirements. How can you dislike the democracy of the crypto-environment?
All this may be nice and cool but what are the Dai use-case and benefits?
- Dai offers financial independence to all
It allows anyone to achieve financial independence, regardless of their location or circumstances.
- Self-sovereing money generation
The “Oasis Borrow” app allows users to access the Maker Protocol and generate Dai by locking their collateral in Maker Vault. Vaults offer individuals and businesses opportunities to create liquidity on their assets simply, quickly and at a relatively low cost.
- Savings earned automatically
Dai holders can take advantage of the Dai saving rate, which, as detailed earlier, builds on the value of Dai by allowing users to earn on the Dai they hold and protect their savings from inflation.
- Fast, low-cost remittances
Cross-border remittances can mean high service transfer fees, long delivery timelines, and frustrating exchange issues due to inflation. The Dai stable coin is used around the world as a medium of exchange because people have confidence in its value and efficiency.
- Stability in volatile markets
It can help protect traders from volatility. Have you ever thought about a stable counterpart when trading altcoins, without relying too much on the USDT centralization and not yet demonstrated backing?
Could MakerDAO's system be successful in the long run?
With this first article on MakerDAO I am inaugurating this new section, that will be 100% about innovative projects. I am starting among the ones present in the Header of the homepage of Publish0x but once finished, I will move forward.
The format will be: two articles about each token/cryptocurrency. The first one with an introduction and the second one, going deeper into the peculiarities of the project.
Let me know with a comment if you enjoy this new Easy & Short section and suggest with a comment some crypto you would like to see analyzed!