Maker (MKR) is a new entrant into the world of
Maker (MKR) is a new entrant into the world of cryptocurrencies, and it is trading on Ethereum blockchain. The MKR acts as a smart contract and hedge currency, it trades along with DAI coins on the Ethereum network. MKR is responsible for minimizing the volatility of the DAI so that it can remain stable against the USD. MKR stabilizes the DAI bond through the Collateralized Debt Positions (CDP) platform.
DAI is one of the most prominent and stable forms of cryptocurrency in the market. It has been created as such that at any given point value of 1 DAI will be equal to 1 USD. The stable nature of the currency makes it more acceptable and find many uses in the daily world. For example gambling, international trade, transparent accounting systems, and the general financial markets
Maker was first launched as an independent Tradable token on the Ethereum blockchain back in 2015. However, in 2016, the developers relaunched it as a dual nature Stablecoin. The basic idea for such a dual-natured token system came from Tether, another prominent and stable cryptocurrency which operates on Bitcoin blockchain. However, Tether has been marred in controversies regarding the transparency and fraudulent trades on the Bitcoin blockchain. This is the reason, developers of the Ethereum blockchain created Maker, which not only stabilizes the DAI currency but also provides excellent transparency for real-world usage.
How does Maker (MKR) Work?
To get into the Maker system, you need to create a CDP first. Once you have paid all the debts for your DAI, you get its full ownership. It is like taking a loan from your bank; you give something as collateral to the bank, you receive the credit in return. You pay the interest rates on investment, and when you finally pay everything back, you collect your collateral from the bank.
How to buy MKR tokens?
You can buy the maker(MKR) token through an Ethereum blockchain, actually, it’s a fiat-to crypto exchange first, where you buy either BTC or ETH from coinbase or any other Exchange of your choice. Now, you go to the ethereum blockchain and exchange your cryptocurrency for MKR tokens. You can save your MKR token in MEW wallet. This wallet can also be used to protect any crypto token from the Ethereum blockchain. Both DAI and MKR tokens can be made available through the Oasis Decentralized Exchange (OasisDex), and the exchange can e accessed through Ethereum’s browser.
The total number of Maker (MKR) has been set to 1 million, that means the total number of MKR coins will never exceed the 1 million mark unless any changes are made into its source code. Out of these million MKR coins, 618,000 are already in circulation
Final Thoughts:
MKR has been created to weed out the most crippling issue in the crypto world, the stability factor. Through this mutual correlation between MKR & DAI, the developers aim to provide a stable digital currency to fall back on; many blockchains should come up with similar ideas to create a firm tender of their own cryptocurrencies.