If there’s one thing consistent about Bitcoin, it’s its volatility. For instance, in recent times, Bitcoin has seen fluctuations, with its price currently under $40,000. This volatility — the up and down price fluctuations — discourages many from adopting virtual currencies. Below, we take a closer look at the Maker control token underlying MakerDAO.
What Is Maker?
MakerDAO is a decentralized finance (DeFi) platform based on Ethereum (ERC-20), providing support for a stable cryptocurrency called DAI. When a currency such as Ethereum is staked in MakerDAO, users generate their DAI assets. The core idea is to foster a decentralized economy where users can convert their fiat currency into cryptocurrency while borrowing and lending money. Along with the stable DAI token, the platform also utilizes an MKR governance token, essential for maintaining the stability of DAI.
What Is MKR?
MKR is an ERC-20 token that is created and destroyed in response to DAI's price relative to the US dollar. New MKRs are generated according to DAI's stability. If DAI deviates significantly from the dollar's face value, more MKRs are created, increasing the overall supply.
How to Use MKR
MKR holders benefit financially from MakerDAO’s stable system. As such, MKR holders can vote when the platform makes decisions, such as determining stakes and the types of collateral the protocol can accept. Moreover, one MKR equals one vote, meaning that holders of more MKRs can have more significant influence on the voting results.
MKR, How Does It Work?
Crypto Maker operates on a peer-to-peer protocol within the open and decentralized Ethereum blockchain code, allowing the development of smart contracts (CDPs). Coins from this platform are based on ERC-20 Ethereum so that they can be exchanged for cryptocurrencies like Augur, 0x, OmiseGO, and others due to comparison standards or initial values.
Ultimately, this leads to transactions being executed more swiftly due to the efficiency of the verification processes. To conduct transactions with this cryptocurrency, the user sends a request to create a smart contract (CDP). Then, they must enter the number of Ethers that will serve as a fund or guarantee the appropriate amount of DAI. MKRs are also produced when this happens, and the system locks the Ethers that served as collateral accordingly.
Who Created MakerDAO?
Rune Christensen, a Dane, is the mind behind MakerDAO. Before co-founding the international recruitment company Try China, he studied biochemistry and international commerce. Starting in 2014, Christensen founded and led the Maker Foundation, based in Santa Cruz, California.
Christensen, alongside ex-Amazon software engineer Andy Milenius and several other developers, began developing a decentralized platform in March 2015 that allows users to borrow cryptocurrency Stablecoins.
Where Can MKR Be Stored?
It's crucial to store your purchased Maker tokens in a safe and reliable wallet. Various Maker wallets are available in the market and online. When choosing a wallet, the main focus should be on security and ease of use. Guarda (https://guarda.com/) is one option where you can store your MKR tokens. The platform also enables you to perform other transactions like exchanging, sending, and receiving MKR.
How Is MKR Purchased?
MKR is available on various cryptocurrency exchanges, including Guarda. Guarda is a secure, non-custodial wallet exchange platform that allows you to purchase, exchange, and store MKR and other tokens. It's available on web, desktop, and mobile wallets. To purchase MKR tokens, first, download the app or use the browser version. Then create an account on the platform, save your password, and add the wallet to your list. After these steps, you can begin purchasing the token and other tokens.
The Future of Maker?
MakerDAO is committed to transparency by providing videos of its daily meetings online. MakerDAO and its MKR tokens remain at the forefront of the decentralized finance (DeFi) sector. MakerDAO’s efforts to create a stable coin without redundancy issues are commendable. However, MakerDAO has developed a scheme to preserve the value of its stable DAI coin, which may promote its wider use because of MKR’s guarantee mechanisms and security flaws.
MakerDAO also has an emergency mechanism called “global settlement” as insurance. The user community holds settlement keys if something goes wrong in the MakerDAO schema. These can be used to initiate an agreement whereby DAI owners are issued a CDP guarantee for an amount equivalent to ether.