Introduction of Maker
Maker’s MKR Coin is a newcomer to the market and not a well-known project. However, after today, many more people will recognize it when it explodes by 40% and it is one of the most popular coins in the recent high period.
MKR is a cryptocurrency defined as a smart contract platform that works alongside Dai coin and Aims to act as a currency that provides consumers with a more stable alternative to many existing coins. in the market. The developer offers a stable system that is fully auditable on the Ethereum blockchain. Founded almost three years ago, MakerDao is led by Rune Christensen, its CEO and founder.
A brief history of the Maker
The project was reportedly conceived in 2015. However, it did not begin until 2017. It was all founded by Rune Christensen, a Danish entrepreneur from Sealand. Christensen earned a degree in biochemistry from the University of Copenhagen and studied international business at Copenhagen Business School. Before venturing into cryptocurrency, Christensen founded and managed global recruiting firm Try China.
When the project started in August 2015, it was the first tradable token on the Ethereum blockchain. The developer phase was finally launched in April 2016, although it was not an autonomous environment at the time. The funds were issued through the exchange of Bitcoin (BTC) and Ethereum (ETH) for the MKR token. The developer’s work took a big step in December 2017 when it created an asset linked to the US dollar (USD). This asset, called the DAI token, is a stablecoin that trades in USD at a 1:1 ratio. The project has seen many other signs of progress in the past three years.
What problems does Maker (MKR) solve?
An activist is trying to solve many of the problems faced in the traditional financial sector. The platform combines a unique selection of proprietary technologies to accomplish this task. Today, Creator works as an integral part of the DeFi community. DeFi refers to the ever-growing sector of the non-profit financial industry. The purpose of DeFi is to provide a good solution for the centralized financial services currently implemented for the public.
A word of understanding
One of the main issues that the Creator is trying to solve is understanding. The network uses smart contracts to eliminate the need to trust one party. Currently, major coins like Tether USD require more trust and network security. In most cases, you have to rely on third-party auditors to evaluate the company’s assets. Who did remove the need to trust the central office.
You don’t have to wait for external audits or company statements. The entire network is traceable through the blockchain. The perpetrator continues. For example, company employees post a recording of each meeting on the SoundCloud company page for all employees to view.
Volatility
The main task of MKR is to ensure that DAI remains in dollars. This double layer privacy policy helps prevent fraud and gives users more security in the case of a refund.
How does the Maker’s work
The project has one goal: to democratize credit and enable individuals, regardless of their financial situation, to access credit – in one word, the money that pays (DeFi ). The only thing borrowers need to accept a loan with is cryptocurrency as collateral. This crypto is locked in a DAO (autonomous assembly) and secured by smart contracts. In exchange for this locked contract, borrowers receive DAI coins. DAI, like other stablecoins, has a stable value and does not experience the volatility that many cryptocurrencies struggle with. DAI is denominated in dollars, which means that each DAI coin must be equal to $1.
Because DAI is denominated in US dollars, you only have to pay back what you originally borrowed, plus interest. For example, if I deposit 1ETH and get back 100 DAI, to get my money back, I have to get back 100 Dai plus fees. Then I can get my 1 ETH back. However, other stablecoins work differently. If the invested assets experience a fall in value, the person will have to repay more money to repay the loan. So, in the DAO Developer system, borrowers know exactly how much they have to pay and there are no unpleasant surprises.
But what if crypto and vaults fail? What happens then? This is where Maker Token (MKR) comes in.
The Maker’s coin is used
MKR, unlike DAI, is flexible. This token is used to provide financial support of crypto stored in vaults during price declines. If during these times, the value of keeping the cryptocurrency is not enough to cover the corresponding DAI coin, the protocol liquidates the contents of the vault.
If the number of DAI produced in the liquid system is not enough, the system generates a new MKR signal. The protocol then sells tokens to cover the shortfall. MKR supply level is increasing. MKR is also necessary to pay the debts received from the CDPs (Debt Contracts) used to create the Dai in the Creator process.
However, MKR is not the only tool used. One major function of tokens is to help manage complex systems.
