Maker

What is Maker?

Maker (MKR) is an Ethereum-based smart contract platform designed to address the issue of volatility in the cryptocurrency market. Its primary objective is to establish a next-generation blockchain-powered banking system, facilitating faster and simpler international payments as well as peer-to-peer transactions. The project's main focus is to support and stabilize a collateral-backed digital currency called DAI Stablecoin. DAI functions as a form of digital currency that maintains its purchasing power by being pegged to the US dollar. This stability is made possible through Maker's unique smart contracts, referred to as Collateralized Debt Positions.

The platform allows anyone to utilize their Ethereum assets as collateral to generate DAI. Once users possess this cryptocurrency backed by collateral, they can freely transfer it to others, use DAI for purchasing goods and services, or retain it as a long-term investment.

The MKR Token

MKR, unlike DAI, does not function as a stablecoin and therefore experiences price volatility. However, it plays a pivotal role in the ecosystem and supply mechanics of the platform. MKR serves three primary purposes within the platform: it acts as a utility token, a governance token, and a resource for recapitalization. As a utility token, MKR is utilized to cover various fees associated with the generation of DAI. Whenever these fees are paid, MKR tokens are burned, effectively removing them from circulation. The supply of MKR is directly influenced by the demand for DAI.

Holders of MKR also possess the right to participate in voting processes that pertain to risk management and the business logic of the Maker system.

How Does Maker Work?

The Maker platform utilizes a distinctive smart contract system known as Collateralized Debt Positions (CDPs). To generate DAI, users are required to deposit collateral assets, which are then held within CDPs. Throughout the process of generating DAI, users incur debt. This debt effectively secures the user's deposited collateral assets within the CDP until the point at which the user can repay the debt and withdraw their collateral. It is important to note that the value of the collateral assets is always greater than the value of the generated DAI (and the corresponding debt).

What Can You Vote on with Maker?

Every holder of Maker tokens possesses the right to vote on various changes within the Maker Protocol, with their voting power determined by the amount of MKR they hold. Some of the protocol aspects that MKR holders can vote on include:

• Addition of new collateral asset types to the protocol: This allows users to propose new cryptocurrencies as collateral, leading to the minting of additional DAI.
• Modification of risk parameters for existing collateral asset types: MKR holders can vote on adjusting the risk parameters associated with different collateral assets.
• Alteration of the DAI Savings Rate: Holders of DAI tokens can earn savings by locking them in a designated contract, and the Savings Rate determines the profitability of this contract.
• Selection of oracles: MKR holders have the authority to choose the entities responsible for providing reliable off-blockchain data to the Maker ecosystem.
• Upgrades to the platform: MKR holders can vote on implementing upgrades and improvements to the Maker platform.

Maker Team Background

MakerDAO, the inaugural component within the extensive Maker ecosystem, came into existence in 2015 through the visionary efforts of Rune Christensen, an enterprising individual hailing from Sealand, Denmark.

Having completed his education in biochemistry at Copenhagen University, Christensen further pursued his studies in international business at the esteemed Copenhagen Business School. Before embarking on the MakerDAO venture, he played a key role in the establishment and operation of Try China, an international recruitment company.

Maker Project Development

MakerDAO's "Endgame" strategy encompasses several significant milestones. This includes the launch of six "Maker SubDAOs" and NewStable token farms, aimed at streamlining Maker Governance. In parallel, the Spark Protocol provides a new DeFi lending solution for DAI users.

The roadmap's third phase emphasizes AI integration. MakerDAO plans to deploy internal AI tools to optimize governance tasks and contribute to open-source AI development through "The Purpose Fund," supporting socially impactful projects.

The fourth phase introduces the "Governance Participation Incentive," utilizing gamification and rewards to drive user engagement on the platform.

Additionally, MakerDAO intends to develop its own blockchain, NewChain, which will be bridged with the existing Ethereum blockchain, expanding functionality while maintaining compatibility.

Maker Price Analysis

As of November 24 2024 Maker has a marketcap of $1.5B. This is {{percentagefromath}} from its all time high of $6.29231K. In terms of its tokenomics, there's a total supply of 915K with 97% currently outstanding. Keep in mind Maker has a fully diluted value of $1.5B which many investors might interpret as overvalued.

Of course, don’t trust price predictions alone, always check the Coinrotator token screener to follow the trending market.