Maker

MarkerDAO is one of the projects focusing on decentralized finance called Decentralized Autonomous Organization or DAO.

What is Maker?

  • Beginning in 2015, MakerDAO was initiated by Rune Christensen, who recognized some limitations in Bitcoin. He saw that Bitcoin has a maximum supply and is used for speculation, as the result, Bitcoin price might be too volatile to be a medium of exchange like fiat currency. Thus, Christensen initiated a financial system that could generate stablecoin offering stability and low fluctuation for our daily use.
  • The stablecoin, Dai or Sai token was designed and created by MakerDAO and it was called Dai Stablecoin System as it uses only one type of cryptocurrency for collateral. The token was also called Sai standing for Single Collateral after the launch and Maker Governance had proposed a policy to develop and upgrade the token to support various types of collateral cryptocurrency. This initiation brings about Multiple Collateral Dai System (MCD), also well-known as Maker Protocol.
  • Dai is different from other stablecoins as cryptocurrencies are backed in the Maker protocol before creating Dai. Unlike USDC and USDT that US dollar is held in reserve in different proportions depending on the issuer’s policies which are difficult to verify while Dai is managed with on-chain enabling users to verify the processes.
  • MKR Holders will be able to vote and propose changes on policies to the network of MakerDAO and all Maker Protocol for improvements.

Key Metrics

TickerMKR
Token NameMaker
Token Type/ProtocolERC-20
Total Token Supply1,005,577 MKR
Current Circulating Supply See Coinmarketcap
Market Capitalisation See Coinmarketcap
Token Creation DateApr 2015
Can it be mined?No

Who is behind Maker? 

MakerDAO was initiated in 2015 by Rune Christensen, an entrepreneur from Sealand, Denmark.

Christensen graduated from Copenhagen University with a degree in biochemistry and studied international business at the Copenhagen Business School. Prior to MakerDAO, he co-founded and managed the Try China international recruiting company.

What is the purpose of Maker?

Maker was created with the purpose of changing on policies to the network of MakerDAO and all Maker Protocol for improvements, for example:

  • Adjust the amount of cryptocurrency used as collateral within the Marker Protocol Vault
  • Adjust risk parameters such as liquidation ratio and debt ceiling
  • Launch Maker community’s product such as Oasis Hub
  • Upgrade Maker’s Protocols

Insights:

Maker attempts to rectify multiple issues encountered in the traditional financial sector. The platform combines a unique selection of proprietary technologies to accomplish this task.

  • One of the main problems that Maker attempts to correct is transparency. The network utilizes smart contracts to eliminate the need to trust any party. 
  • The core function of MKR is to ensure that DAI remains pegged to the dollar. This dual crypto strategy helps to prevent volatility and provides users with more security in terms of the project’s resilience.
  • Maker continues to see growing popularity mainly because it brings a lot of benefits to the market. This unique token serves multiple purposes within the Maker ecosystem. These functionalities add to the overall usability of this token. Here are some of the main benefits you gain when you hold MKR.

Risks:

  • MKR and Dai can only be used and supported on Ethereum blockchain.
  • MKR price is fluctuated depending on the demand of Dai.
  • Bugs in the smart contract during the information flow process in the protocol.
  • Risk in balancing between the collateral during the severe panic condition of the market which directly affects the system. In March 2021, Ethereum’s rapid slump to 30% in 24 hours had caused a $4 million debt on Ethereum collateral.

News and Updates:

  • NOWPayments, an instant crypto payment system, accepts Dai as one of the tokens for payments and transactions.
  • Splinterlands, a creator of collection Game Cards on blockchain, teams up with MakerDAO utilizing Dai for purchasing item cards in the games. MakerDAO is also a sponsor of the Card Tournament prize in which the winner will receive Dai as a winning prize.
  • Paycek, an online payment application from Croatia, initiates Dai for financial transactions which can be used to pay for various services such as food, museum and exhibition tickets and so on, starting a trial in Croatia.

Community & Whitepaper Links:

Disclaimer: 

All investment is speculative and involves substantial risk and uncertainty. Investors should understand the nature of digital assets including the terms of return and the risk of assets. We encourage investors to fully understand the assets and the risk associated with them prior to making any investment.

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