Whatismakerdao1

The Maker Platform has two monetary values: Makercoin (MKR) and Dai (DAI). Established about three years ago, MakerDao is run by Rune Christensen, CEO and founder.

Maker coin – MKR – Maker It is a crypto paradise with a floating value used to manage the platform and to mediate the creation of Dai’yi.

Dai – A stable cryptocurrency that always has a fixed value ($ 1).

Fluctuations in the value of crypto-denominated currencies are a fixed-rate payment instrument. Depending on price fluctuations, cryptocurrencies are not ideal for use as direct payments or collateral at this time. Cryptographic assets that do not fit within minutes are required to have stable crypto parallax (such as Tether) to mitigate market risk.

A fixed coin, unlike Bitcoin or Ether, does not have volatility. The value is a low-volatility cryptocurrency fixed to a certain price currency. This money allows traders to maneuver more effectively without having to use the money. It also allows cryptocurrency exchanges to provide “fiat-type” currencies to their users without having to undertake lengthy and rigorous verification processes that allow price trade.

dao cryptocurrency
dao cryptocurrency

The Maker is one of the best examples of the many great products and services that people can develop using Ethereum’s intelligent contract platform. Essentially, there is the Maker Platform to produce Dai’yi and Dai token to reduce the price volatility against the US Dollar. With the Maker (MKR) everyone can use Ethereum assets to generate Dai. Once created, Dai can be used in the same way as any other crypto-currency: it can be sent freely to others, used as a payment for goods and services, or held as long-term savings.

Maker Platform is a clever contract platform that controls and sells Dai. Removing a central organization and confidence in the difficulty of third-party inspections, the Maker Platform has created a transparent stable coin system that can be fully audited in the Ethereum blockchain. Dai was put on the market to facilitate trade as one of the first anti-centralized stable coins operating in the Ethereum blockchain. The decentralized Maker platform balances the value of Dai to a US dollar using foreign market mechanisms and economic incentives. At the heart of the efficient and decentralization of the process is the relationship between Dai and MKR coin. When Dai is stable, the MKR value fluctuates and allows the users to take advantage of it actively.

mkr review
mkr review

The aim of the Maker (MKR) is to balance the value of the DAI through intelligent contracts called Collateralized Debt Positions (CDP). Maker Coin is more valuable than most digital money on the market because of its significant role in the maker platform and procurement machinery. Since the MKR is an assistant program and management facilitator, it is necessary for the Maker platform to function properly. It is used to pay CDP which is used to produce dai. Once the fees are paid, the MKRs are always burned.

Where Does the Value of MACR come from?

The value of MAC is attributed to the DAI fixed in the US dollar, ie 1 DAI = 1 US dollar. It also uses interest rates to offset the price. Anyone with collateral assets can use them to buy DAI on the Maker platform through CDPs. These CDPs keep assets deposited by users and then allow DAI to be used to purchase or sell the MACR.

Tokens

what is dao ethereum
what is dao ethereum

Both Maker (MKR) and Dai are standard Ethereum Tokens connected to the ERC-20 standard. For this reason, Maker and Dai must be stored in an ERC-20 compatible wallet such as MyEtherWallet. Hardware wallets such as the Ledger Nano S and Trezor, which offer better security than software wallets, are usually the safest way to keep the ERC-20 standard tokens.

Some explanations

If you are only a consumer, you do not need to understand the following statement outside of your curiosity. If you want to buy Dai, you can trade for dollars, bitcoin, ether and other currencies on various stock exchanges.

Dai is supported by collateral (eg ether). Suppose you have ether and you want to create Dai. Your first move will send your Etheric to a “collateralized debt position” known as CDP. CDP is a type of software that runs on a block-chain, ethereum blockchain and Maker (MKR) lives in the ecosystem. This is called a smart contract.
The whole Maker (MKR) ecosystem is based on “smart contracts” like CDP.

A blockchain allows a car to do most of the things you need in your own life. Bitcoin, the first network that provides the use of this concept, is the forerunner. From point A to point B, you could send a bitcoin without having to trust anyone but yourself. All trust is given to the blockchain, which is not controlled by anyone. Ethereum took this concept a step further and allowed users to add instructions to these transfers. In this way, intelligent contracts were born.

what is dao
what is dao

The basic smart contract in the Maker (MKR) is the CDP. Let’s make a sampling so that you can understand CDP better. You are in a bank where you will be asked for a housing loan. You indicated that you will buy the house as a guarantee and they gave you credit for it. If the value of your home decreases, they will ask you to repay the loan. If you can not repay the credit, they will take your house from your hand. To adapt this to the Maker, change your home to Ether, the smarter bank and the credit to Dai. That is all.

To get Dai as a loan (like borrowing from a bank), you give your Ether as a guarantee to the Maker (MKR)CDP smart contract. If your Etherin falls below a certain threshold, you will have to pay back to the smart contract or you must bring your Ether to the highest bidder auction. In summary, CDPs are where the collateral (etherin) in the Maker (MKR)system is kept. When your EtherP is in CDP intelligent contract, you can create Dai. The amount of money you can create depends on how much ether you add to the CDP. This rate is fixed, but it can be changed over time.

What is the task of Maker?

what is MKR
what is MKR

MCR is required to pay the accrued fees for CDPs used to generate Dai in the Maker system. Only the MKR can pay these fees, and when the MKR is paid, it is subtracted from the source. This means that when Dai and CDPs adopt and raise requests, they will be charged an additional fee for the MKR so that users will be able to pay fees. It also means that the supply will be diminished as the MKR is burned.

As a management co-operation, the MKR is used for voting for the Maker system’s risk management and business logic. Risk management is crucial for the success and survival of systems, and in practice, each security asset and the specific risk parameters for the CDP type are valued.

The voting process for system administration is through continuous approval voting. This means that with the MKR held by each MKR owner, he can vote for any number of offers, offer a new offer, or withdraw his votes at any time. The proposal that receives the most votes from all MKR owners becomes the “highest recommendation” and can be activated to modify the system’s risk parameters.

The votes of the MKR owners determine the collateralization rate of CDPs. MKR owners are the highest authorities in the Maker system – they manage the system and benefit financially when they are well maintained. MKR owners are charged to organize the system. For this, most people buy MKR. Maker coin (MKR) acts as a last resort. If the collateral in the system is not sufficient to cover the amount of Dai in the current situation, the MCR is recreated and sold in the open market to increase the additional collateral.

To keep the system as safe as possible, and to prevent things that are unpredictable, the Maker team has added a process called the global solution. When the universal solution is triggered, the entire system is frozen. Dai’s in the CDPs are returned as a guarantee to all their owners. I mean, if a global agreement is triggered and there are 100 Dai’s and if an ether is worth $ 100, I can spend 100 Dai directly on an intelligent contract for an ether.

The most significant exchange for the MKR is Oasis – a decentralized exchange that operates entirely in ethereal contracts, is entirely autonomous without human control, and has 0% concrete. The decentralized Oasisdex exchange platform and the CDP margin trading platform have combined at a near time. At the same time, DigixDao partnered with Maker to help deliver Digix Gold tokens to Dai.

In the following months, the Maker Platform plans to expand the number of collateral types that can be used to produce Dai. At this point, only Pooled Ethereum can be used to create CDP and Dai. The maker’s development roadmap is extensive and focuses on the widespread adoption of Dai over time in multiple blockchain implementations.

References:

https://medium.com/makerdao/what-is-mkr-e6915d5ca1b3

https://medium.com/cryptolinks/maker-for-dummies-a-plain-english-explanation-of-the-dai-stablecoin-e4481d79b90

https://coincentral.com/maker-dai-beginner-guide/
https://www.cointelligence.com/content/comparison-erc20-erc223-new-ethereum-erc777-token-standard/

 

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About the author

I am graduated from the faculty of communication. I have worked for major companies in the communication field, and acquire more than 12+ years of experience. I like to read empowering books, traveling and researching useful stuff on the internet. For a few years now, I have cultivated and developed a passion in the cryptocurrency world. I have decided to dedicate my time to create some posts on my blog about cryptocurrencies in general. Cryptocurrency World is growing fastly and will have longevity future however it has just born. I intend to improve myself on blockchain technology and share my knowledge.

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