In recent years, it seems like every day a new cryptocurrency or digital asset is created. With over 1,500 different digital assets and dozens of exchanges, it can be hard to keep track of everything, especially if you’re new.
One of the most popular digital assets is Maker (MKR). The Maker coin is the Maker platform’s native cryptocurrency unit. It coexists with DAI, a decentralized stable coin built on the Ethereum blockchain, on the same platform. This guide will cover everything you need to know about the Maker crypto native tokens DAI and MKR, as well as the Maker platform itself, including how it works and its applications.
What Is Maker?
Maker is a digital asset and a decentralized autonomous organization that lives on the Ethereum blockchain. The company behind Maker is MakerDAO, and it’s one of the most popular projects in the Ethereum ecosystem.
The main goal of Maker is to provide a platform for users to create and manage digital tokens. It also aims to help stabilize the value of those tokens. It does this by using a system of smart contracts, which are programs that live on the blockchain and automatically execute themselves.
What makes Maker unique is that it’s one of the few decentralized projects with a working product. The Maker platform has been live since December 2017, and it currently has a market capitalization of almost $1.5 billion.
How Does Maker Work?
The Maker platform consists of two main components: the Dai token and the MKR token.
- The Dai token is a digital asset pegged to the US dollar. This means that 1 Dai always equals $1 USD. The Dai token is used as a stablecoin, a type of digital asset that aims to maintain a stable value.
- The MKR token is used to govern the Maker platform. MKR holders can vote on various proposals that help shape the platform’s future. They can also earn interest on their MKR tokens.
To create Dai, users first need to lock up collateral in the form of digital assets. The Maker platform supports various digital assets, including Ethereum, Bitcoin, and even fiat currencies like the US dollar.
Once the collateral is locked up, users can then mint Dai. The amount of Dai that can be minted is based on the collateral value. For example, if you lock up $100 worth of Ethereum, you can mint 100 Dai. If the collateral value falls below a certain threshold, the Dai token will automatically be sold to cover the loss. This is referred to as a liquidation event.
What Should You Use Maker For?
The Dai token is the main use case for the Maker platform. Dai can be used in a variety of ways, including:
- As a stable coin. Because Dai is pegged to the US dollar, it can be used as a way to store value or hedge against volatility.
- As a loan. Dai can be used as collateral for a loan. This is possible because real assets back the Dai token.
- As a payment method. Dai can be used to make payments. Because it’s pegged to the US dollar, it can be used anywhere that accepts USD.
What To Do Before Buying MKR?
Before you can buy MKR, you first need to buy some Ethereum. Once you have some Ethereum, you can then use it to buy MKR on an exchange.
MKR is a popular digital asset, so it’s listed on various exchanges. In most cases, you’ll be able to buy MKR with either Ethereum or Bitcoin.
Once you have your MKR tokens, you’ll need to store them in a secure wallet. The best way to do this is by using a hardware wallet like the Ledger Nano S. This will ensure that your MKR tokens are safe and secure.
Is Maker A Good Investment?
MKR is a popular digital asset, and it has a lot of potentials. The primary use case for the Maker platform is the Dai stable coin, which has a variety of uses.
Because of this, MKR is a good investment for those who believe in the future of stablecoins. It’s also a good investment for those who want to participate in the governance of the Maker platform. However, crypto investments are always risky. Before investing, you should always do your own research and talk to a financial advisor.
Investing in crypto is always risky, but MKR is a popular digital asset with a lot of potentials. MKR undoubtedly has a bright future ahead, and it’s a good investment for those who believe in the future of stablecoins.
With any investment, you should always do your research and talk to a financial advisor. This ensures that you’re making the best decision for your situation.