For those unfamiliar, Maker (MKR) is an ERC-20 token that is native to the Maker protocol, decentralized finance (DeFi) project that is also known as the Multi-Collateral Dai (MCD) system because it allows users to leverage assets to generate Dai, a community-managed decentralized cryptocurrency that tracks the price of the US dollar.
Maker functions as a governance token, giving MKR holders a say on Maker Protocol upgrades and ideas that could alter Dai’s use.
Looking to learn more about Maker (MKR) but don’t know where to start? Do not fret. This guide is meant to educate you on all you need to know about the project so that you may dive headfirst into the easiest trading experience on the market.
What Is Maker?
As a peer-to-contract lending platform, Maker (MKR) encrypts Ether in a smart contract and issues a stablecoin connected to the US dollar called Dai, allowing for over-collateralized loans. The dynamic structure of collateralized debt positions (CDP), self-feedback mechanisms, and external actor incentives underpins Dai’s stability. Dai can be given away without restrictions, spent on goods and services, or kept for the future.
A Concise Overview of Maker’s History
The Maker protocol was launched in 2014 to create a decentralized, permissionless currency. Their ultimate goal is to make it possible for people to take out loans with cryptocurrencies as collateral. These loans are issued by smart contracts in the form of DAI, a stablecoin with a soft peg to the US dollar.
The Maker Foundation has worked with several other organizations to improve the protocol, and it has gradually made efforts to relinquish some of its monopoly on the space. They ultimately ceded control to MakerDAO, a decentralized autonomous organization (DAO) that monitors the protocol. The MKR token gives holders a voice in the DAO’s governance and is held by people all over the world.
The Maker MKR coin is a means of participation in the Maker ecosystem for lenders and investors.
The company’s current CEO and software developer, Rune Christensen, launched the initiative in 2015. Currently, Denmark is serving as the platform’s base of operations.
MKR is an ERC20 token that represents a stake in the Maker Project and is issued and managed independently of any central authority.
For instance, the platform was pioneering in trading tokens on the Ethereum network.
One of the most well-known ETH-based platforms is Maker. As of this writing, Maker CDP Contracts have locked up over 2.1 million ETH.
How Does Maker Work?
Maker Protocol uses Maker Vaults, which are essentially smart contracts, to create new Dai.
Web user interfaces and apps serve as entry points to the network to create these contracts (such as Oasis Borrow or Instadapp).
The user must return the Dai they created plus a stability charge before the smart contract would release the collateralized cryptocurrency.
The Maker Protocol can also be controlled with the MKR token.
Voting proposals are implemented in smart contracts and can be submitted by anybody with an Ethereum address.
The community of MKR holders can then vote on which suggestion they would want to see implemented, with the winning Ethereum address being given the power to implement the proposed change to the Maker Protocol.
What Are Smart Contracts?
First popularized in the 1990s by computer scientist Nick Szabo, smart contracts are a form of computer code that digitally simplifies the execution of a business deal or other agreement between two or more people when certain criteria are satisfied.
Having been recorded on a distributed ledger called a blockchain, the codes can’t be altered and the results have been verified by all users.
What Is Maker Coin
The Maker platform’s in-house cryptocurrency is denoted by the symbol “MKR.” Dai, a decentralized stablecoin built on the Ethereum blockchain, also functions on the same platform.
In December 2017, after the combined efforts of 35 people working under Rune Christensen, the Dai currency was released to the public. Dai attempts to address the problems with the volatility of traditional cryptocurrencies, which hinders them from achieving widespread adoption as a payment system.
Dai coin provides stability relative to the US dollar (1 USD = 1 Dai) and is backed by collaterals, as opposed to volatile value swings that can vary daily.
Dai coin also facilitates increased access to financial services for its customers worldwide. This involves having a reliable source of loans and freedom from arbitrary government regulations in the credit sector.
Maker coin is a platform utility token that guarantees the smooth functioning of both the Maker platform and the Dai stablecoin.
Market Value of Maker Coins
In contrast to its “brother,” the Dai currency, the value of the Maker coin fluctuates and is not backed by any asset-holding entities like banks.
Dai is supported by a system built on smart contracts, while its rivals like Tether are supported by fiat currency kept in bank reserves. Users retain complete discretion over the usage of their Dai coins, which can be sent to wallets located anywhere in the world.
Maker also aspires to become a platform for dapps (decentralized applications) that is less susceptible to market swings.
Maker Coin Use Case
Maker Coins are platform governance tokens that provide their holders a voice in major platform decisions.
Some examples are determining the appropriate debt ratio, making payments on Dai loans, and managing risks. The Maker coin is required to pay the one percent annual interest rate on Dai loans.
Tokens issued by Maker (MKR) can be used to pay costs associated with the collateralized debt position (CDP) mechanism enabling Dai’s creation. As fees are paid, MKR coins are used, driving up demand alongside the Dai coin. If the Maker platform determines that a portfolio is undercollateralized, it will issue a new supply of MKR tokens automatically. By increasing the Maker ecosystem’s financial security, the coin is put to good use.
The Maker coin’s market capitalization dropped from an all-time high of more than USD 1 billion in early 2018 to a current level of USD 482 million as of November 2018.
How Many Maker (MKR) Coins Are in Circulation?
When MakerDAO first debuted, a total supply of 1,000,000 MKR tokens was available. The value of the 902,000 MKR represents over $2.1 billion US Dollars in circulation at the moment. The overall number of Maker tokens in circulation and their value fluctuate in response to fluctuations in the token market.
Maker Vault stablecoins are backed by a pool of cryptocurrencies, which could be liquidated if their value drops below the Maker Vault smart contract’s liquidation threshold.
New MKR tokens will be produced if Dai raised in auctions is insufficient to meet the vault’s financial commitments. On the other hand, if more Dai is produced than is required, they are used to repurchase Maker tokens, which are then destroyed. While the value of Dai is fixed at $1 USD, the value of MKR fluctuates when the total supply of MKR changes.
How To Use Maker
Maker tokens’ primary use is in voting for protocol and Dai administration. Whenever an MKR token is used in a voting contract, it represents one vote. Users pledge Maker tokens (MKR) to a proposal, with the final tally determined by the total amount of tokens pledged (not the number of MKR holders).
Since the supply of MKR tokens might grow if system debt exceeds the surplus, Maker tokens can also be useful as a recapitalization tool. This encourages Maker token holders to regulate the Maker ecosystem properly and limit their risk exposure.
Due to its unstable pricing, Maker is rarely used as a medium of exchange; however, individuals may opt to invest in it speculatively.
How much does Maker currently cost?
The current price of a single Maker is NGN 314,186.11.
What is the market cap of Maker?
Maker is worth NGN 307.12B at the moment in the market. When a company’s market capitalization is large, investors place a high value on its assets.
When did Maker reach its all-time high?
Maker’s all-time high value is NGN 2,684,067.85. This all-time high is the highest amount paid for Maker since it was launched.
What is the 24-hour trading volume of Maker?
The Maker has had a trading volume of NGN19.29B during the past 24 hours.
What other assets are similar to Maker?
The market capitalization of assets like eCash, BitTorrent-New, and IOTA is comparable to Maker. Check out our list of similar market cap assets for more information.
How many Maker are there?
There is currently 978 000 Maker in circulation.
What is the typical holding time of Maker?
Coinbase users typically hold Maker for a median of 7 days before being sold or sent to another address or wallet.
What is the relative popularity of Maker?
On Coinbase, Maker is the fortieth most valuable cryptocurrency. At the moment, popularity is determined by the proportion of a market’s capitalization that the asset commands.
What is the current trading activity of Maker?
At present, 88% of Coinbase’s customer base has purchased Maker. In other words, in the last 24 hours, 88% of Coinbase traders have accumulated a larger net position in Maker.