Maker – cryptocurrency for attracting investments

What does the company/project do?

cryptocurrency (MKR) is a digital token of the Maker project created on the Ethereum platform, the main goal of which is to create a line of decentralized digital assets that would be tied to the cost of real instruments, such as currency, gold, etc.
It is planned to create an exchange based on this platform , on which it would be possible to carry out margin trading of tokens on the ERC20 protocol.

basic information

Characteristics of Maker Cryptocurrency (MKR)

Maker cryptocurrency indicators as of May 3, 2020:

A little history

When Ethereum was just being born, there was already talk about the demand in the market for stable currencies, the so-called “stablecoin”, the price of which would not be taken out of thin air, but would be tied to something real, for example, to precious metals or fiat currencies . Now the idea has become a reality.

The long-awaited “stablecoin” on the Ethereum blockchain was developed by the Maker project. It itself is a decentralized organization that is completely autonomous (abbreviated as DAO). And his stablecoin is named Dai and supports the ERC20 standard.

It is worth noting that the Dai cryptocurrency is indeed very stable. Its rate almost always remains at the level of plus or minus about 1 US dollar per 1 Dai. Over the past month, for example, fluctuations ranged from 0.91 to 1.01 cents, which are insignificant figures. Average daily price fluctuations usually do not exceed 5%.

Maker also has its own MKR token, which finances the project’s activities. The company has secured the support of the Ethereum Foundation and, according to the developers, is an integral and important element in the ecosystem of Ethereum itself.

MKR is necessary to attract investment into the Maker project itself. MKR holders are something like shareholders, only instead of a joint stock company there is a decentralized autonomous organization (DAO).

These shareholders are the highest authority in the company; they decide all global issues related to business, distribute the profits themselves, but are also responsible with their invested capital for the decisions made.

What we have at the moment is the Dai token (stable = $1) and the MKR token (regulates Dai) , which has a volatile price due to its unique delivery mechanics and role on the Maker platform.

Here's an example of how they interact with each other...

Description

Token (MKR)

MakerDAO was created and its main goals are to maintain the stability of the MakerDAO DAI token and provide governance for the Dai Credit system.

Over the past 18 months, many new stablecoins have emerged in the cryptocurrency space. Their development was driven in part by the need to fill potential stablecoin bugs as the first and most commonly used USDT token was facing problems.

Of course, there is also a constant push in the cryptocurrency space to develop less volatile tokens that will be used more widely. Below we'll take a closer look at the Maker cryptocurrency that powers MakerDAO.

What is Maker?

Maker (MKR) was created by MakerDAO and its main purpose is to maintain the stability of the MakerDAO DAI token and provide governance for the Dai Credit system. MKR owners make key decisions regarding the operation and future of the system.

MakerDAO has two tokens, MKR and DAI. DAI is a stablecoin designed to provide an alternative to more volatile cryptocurrencies, as well as a new type of financial system.

In the meantime, MKR is used to maintain the stability of DAI. Traditional stablecoins use reserves of other currencies or even gold to peg the cryptocurrency to the value of those real-world assets to keep it stable. But this proved problematic. MakerDAO uses the MKR token to counteract price fluctuations.

Some stablecoins gain lower volatility due to their support for Fiat and physical assets. Other stablecoins can be controlled through blockchain-based mechanisms or algorithms to maintain the required value.

What makes it special?

The MKR token helps keep DAI stablecoin at $1. MKR can be created and destroyed in response to DAI price fluctuations to maintain the dollar value of DAI.

DAI uses a collateral system (basically insurance) where holders act as part of a control mechanism that helps govern the network.

DAI is issued when buyers purchase a collateralized debt position (CDP) smart contract, which behaves much like a loan. CDPs are purchased with Ether (ETH) and DAI is given in return.

ETH acts as collateral for a loan, much like a house acts as collateral for a mortgage. The system means that individuals can essentially get a loan against their ETH holdings. When the loan is repaid, the DAI is “burned” or destroyed.

The MKR token is a solution to a scenario where the price of ETH falls too quickly for the DAI system to handle. If the collateral system is insufficient to cover the value of DAI, then MKR is created and traded on the market to attract additional collateral.

The Maker Platform, formerly known as MakerDAO, is the protocol and governance framework for DAI as well as MKR. The platform is a decentralized autonomous organization (DAO) on the Ethereum blockchain.

What can you do with Maker?

MKR holders are given voting rights in the Maker platform's ongoing approval system. MKR holders vote on things like the CDP collateral level.

They receive MKR as a reward for participating. These holders are motivated to vote in a way that benefits the system. If the system works well, the MKR value is maintained or increased. Poor management will devalue MKR.

MKR is an ERC-20 token created using Ethereum protocols. It can be stored in ERC-20 wallets and can be traded on multiple exchanges.

Practical use

District0x team member PJ shared with us that he has been in the market for a new car for quite some time, but for numerous reasons. He had the opportunity to buy his dream car using his ETH to produce Dai and eventually receive USD for credit towards the new car. Additionally, PJ explains his thoughts on Dai:

“The ability to instantly receive a loan from a decentralized bank is a virtual manifestation of what makes crypto so promising and exciting. Using CDP in combination with DAI is a game changer for the space and for those who choose to take advantage.”

Here's his full story :

“I've been in the market for a new (used) car for quite some time, and I've spent the entire year for several reasons: 1) I have a sub 700 point, so interest rates will be high. 2) I didn’t want to “settle in.” I wanted what I wanted, and I was willing to wait for the right car to come along. 3) I didn't want to sell my ETH to buy a car (that would be stupid right?)

So fast forward to December of last year; my brother and I were sitting in the kitchen talking about Dai when we realized we could use a CDP to use my ETH, generate Dai and buy more ETH or (lightbulb...ding!) convert it to USD and use THAT as credit for a new one car. So instead of borrowing from the bank and getting robbed with high interest rates and dealership fees; I could just use the CDP against some of my ETH holdings, pull out the USD, and go buy a car with cash.

So I did. I am now the proud owner of a BMW 335i Sport Sedan which is funded by CDP using DAI and Ether. I'm falling more and more in love with crypto. You may need to look into the "THX DAI" vanity.

And you can read such different stories...here

Course Maker

The Maker project is a unique decentralized platform on the Ethereum blockchain, which is designed to create stablecoins pegged to fiat currencies and other tangible assets. Maker developers have future plans to create their own cryptocurrency exchange. On the exchange it will be possible to trade stablecoins based on Ethereum smart contracts.

The practical implementation of the project was the maker dao platform. It is used to create cryptocurrencies pegged to fiat currencies on the ERC-20 protocol. There is already a ready-made example - the DAI token. The coin is strictly tied to the US dollar exchange rate, the difference in price cannot exceed 5%.

DAI tokens are backed by cryptocurrency collateral and cannot be issued uncontrollably. Anyone who wants to buy a coin opens an application, and the platform automatically takes the ETH cryptocurrency from him as collateral, and issues DAI in return. If the reverse process occurs, then the Dai token burns. This way, Maker will always back the issued coins with other digital assets.

To fully operate, the dao platform must use “fuel”. Mkr serves as such fuel. The token can artificially change its price in order to maintain the rate of stablecoins on the platform. MKR is also a token for attracting investments in the project. It is he who represents the maker platform on exchanges, and also serves as payment for internal commissions.

If you think that there are already enough stablecoins on the market pegged to the same USD, and the Maker DAO, DAI and MKR project is just another in this line, then there are several fundamental differences. Compared to most stablecoins, Maker DAO's internal tokens provide real value. Compared to regular cryptocurrencies, DAI is pegged to a relatively stable fiat currency, and does not have such rate fluctuations as Ethereum or Bitcoin. This does not apply to the internal MKR token. As we wrote above, MKR is a token that ensures the stability of other coins through complex mathematical formulas in smart contracts. This means that it has high volatility. This is not a disadvantage, because traders can make money from such changes.

This internal token of the Maker Project cannot be mined, it has already been released in full. Moreover, with each transaction, MKR will be burned, which should increase the value of the coin. Now the coin can be purchased on popular exchanges, including OKEx, Gate.io and KuCoin. Accordingly, you can store the token on any ERC-20 standard wallet.

Most investors and traders only see the Maker project as an MKR coin. And it has several disadvantages. Firstly, oddly enough, the internal blockchain token for stablecoins is based on the Ethereum blockchain, and is highly dependent on the ETH exchange rate. In addition, failures in the Ethereum blockchain will lead to problems within Makler DAO. For traders, the disadvantage is low capitalization and weak trading. Also, many are confused by the slow development of Maker, since other than DAI, no new stablecoins have yet been released, and the project’s work on its own exchange is also still a big question mark.

Still, the community is warm to the platform for multiple stablecoins, as amid strong market volatility there is a need for stable and reliable coins. Interest in MKR at the moment is provided by the DAI token. And with the launch of new similar coins, this interest will grow.

To follow the Marler project and the MKR token, read Neironix io.

Benefits of Dai

The release of a decentralized stablecoin is, of course, a very good and useful idea, opening up wide horizons of application in the financial and trade spheres. It provides such competitive advantages as:

• complete freedom of action in trade;
• absence of political and geographical boundaries when making transactions;
• anonymity of transactions;
• fight against financial monopolists;
• savings due to the absence of taxes;
• non-interference of government agencies in the personal financial affairs of citizens.

All this will allow you to successfully function in the modern online space, winning more and more fans of such alternative coins.

A significant advantage of this token is the ability to implement absolute anonymity when carrying out any operations. This can be achieved using zk-SNARK technology, already used in the Zcash cryptocurrency, or ring signatures used in Monero. So far, these options are only in plans, and they are not even listed in the MakerDAO road map. But they are going to be implemented in the next version of Ethereum Metropolis and will automatically synchronize with Dai.

Competition

During the existence of cryptocurrencies, attempts have already been made to create stable tokens. But there were not very many such attempts and the most famous of them can be listed:

• Steem Dollar. It was developed specifically for the Steemit social network. The project did not receive significant development, since it was built on the basis of Bitshares and the DPOS protocol. These technologies could not provide a high level of reliability and security for transactions, so Steem Dollar did not develop into anything more than a social token. networks.
• DixitDAO. in fact, this project was supposed to be the first one linked in price to gold, but there was a delay in the audit, which is still being carried out and will only be completed in February 2020. Therefore, the Maker project managed to overtake it.
• Tether. The project was released earlier than Maker, but widespread interest in it faded due to unscrupulous developers who turned their brainchild into a tool of manipulation.

Why does the system include the MKR coin?

However, the coin of the Maker platform is not Dai, but MKR, created specifically to attract financial investments.
It is also implemented on the basis of ERC20. Its owners act as ordinary shareholders, but instead of a standard joint stock company, there is a decentralized company. Being a Maker shareholder is extremely rewarding. Coin holders are the highest authority within the system; they are the ones who will have to solve important tasks regarding the development of the network and business, distribution of profits, etc.

Shareholders, more than anyone, benefit from the active development of the system, because otherwise they may lose the funds invested in the purchase of tokens. That is, they are responsible for the decisions they make with the money they spend, and it is difficult to find a better motivation for making sound and informed decisions than the risk of losing money.

MKR coins cannot be mined , but they can be purchased on the Bibox exchange.

MKR tokens were developed in order to attract the attention of the maximum number of people to the project. With their help, anyone can purchase their share of the platform and take a direct part in its life and development. To do this, you need to participate in ongoing voting in order to influence the chosen path of development of the system, to make it as functional, convenient and beneficial for users as possible through joint efforts.

However, it must be taken into account that by voting, a person takes responsibility for the future of the platform. The rise or fall in the value of cryptocurrency depends on each user. That is, all participants, making an incorrect and ill-considered decision, lose their own funds. But if they make the right decisions, then they themselves contribute to the growth of their capital.

Currently, we can say that the development strategy chosen by users is working quite effectively. After all, in 2020, tokens have grown very much in price: from the initial $20 to $1,500.

The growth of the value of a token is influenced by many different factors. It is also important that the system plans to issue only 1 million coins. In addition, their number may decrease over time, since the likelihood of transferring some of the tokens into real shares of the Maker project cannot be denied.

More details... What is MKR? you can read...here

How does the Dai cryptocurrency work?

The stability of this coin is tied to the situation in the non-cryptocurrency market. If there is silence there, Dai behaves the same way. In response to dollar price fluctuations, the cryptocurrency rate is processed by special software to find the most stable value.

Unlike Tether, the Dai cryptocurrency is managed through software without centralized control. Unmineable and created using ETH tokens that are initially converted to MKR on the Maker platform. The reverse process also applies - you can easily convert Dai to Ether at any time.

System and margin trading

Maker operates on the principle of margin trading. Dai tokens are backed by CDP - collateral for debt obligations, which are sent to a smart contract and serve as a platform for margin trading. This basis allows developers to provide affordable prices, as well as guarantee a high level of security.

Since the system combines a large number of elements: the Market exchange, the Dai stablecoin, as well as the debt trading platform, it is able to provide excellent financial results - the ability to execute transactions for any person or company quickly, conveniently and safely.