Maker (MKR) Research

Maker (MKR) Research Details

Maker (MKR) Maker

INTRODUCTION

Maker MKR is Maker's native token and is backed by Ether rather than fiat. It is the backbone of a simple banking system built on blockchain technology that simplifies cross-border payments and peer-to-peer transfers. DAI is a stablecoin designed according to the ideals of a partial reserve bank and is linked to the Maker MKR. Simply put, it's a safe haven from volatility in key markets.

The Maker Protocol is governed by MakerDAO. MakerDAO is a Decentralized Autonomous Organization (DAO) made up of MKR holders from all over the world. These MKR holders can stake MKR to vote on proposed Maker Protocol changes and ensure that Dai is efficient, transparent, and stable.


HISTORY AND FOUNDERS

The Maker token was created on the Ethereum mainnet and launched on December 17, 2017. The ICO started on January 23, 2018, and ended on February 28, 2018, after raising a total of $10,650,000. Behind the MakerDAO platform and the MKR token is their team with CEO Rune Christensen, CTO Andy Milenius, and COO Stephen Becker.


REASON TO BUILD THE PROJECT

One of the biggest barriers to the mass adoption of cryptocurrencies as a currency is price volatility. Bitcoin, for example, fluctuated in price from $6,000 to $17,000 in 2018 alone. No one wants to spend 10,000 seemingly worthless cryptocurrency tokens on two pizzas a day and wants to see the price jump to over $100 million the next day. Maker DAI is a stablecoin designed to address this volatility.

MakerDAO aims to create a system for obtaining loans and peer-to-peer transactions that maintain the relative stability of fiat currencies such as the US dollar while keeping many of the same characteristics as Bitcoin, such as trust minimization and censorship resistance. This avoids relying too much on the legacy financial system and its existing problems.

BASE OF PROJECT

To keep DAI stable despite significant market price fluctuations, MKR uses three mainnetwork models:

·       The first model is known as the target value. It is mainly used to calculate the value of ERC20 tokens against US dollars.

·       Secondly, we use the Target Rate Feedback Mechanism (TRFM) to decouple the peg to the US dollar to limit DAI volatility during market downturns. In particular, this protocol affects the change in target price over time. In TRFM the sensitivity parameter system is also included. You can monitor DAI price movements against the US dollar and issue a TRFM in case of a market crash.

·       The Collateralized Debt Position Protocol (CDP) allows Makers to be self-sufficient or independent. These powerful smart contracts are considered the backbone of the Maker ecosystem. The CDP contract is executed whenever ERC20 tokens are delivered to the Maker platform in exchange for DAI tokens.


USE CASE

The uses of MKR tokens are:

·       MKR tokens will be used to govern the platform, allowing holders to vote on various parameters such as stability fees, debt limits, collateral used, Dai savings rate, and more.

·       MKR is also used to purchase excess Dai in collateral auctions and to pay stabilization fees in surplus auctions.


MAJOR NEWS AND EVENTS

DATE

NEWS/EVENTS

IMPACT

07/04/2021

Maker focuses on making the protocol fully decentralized and community governed

+80% Increase

08/03/2020

Maker proposes an Emergency proposal after several borrowers were completely liquidated

-60% Decrease

 

25/09/2018

Andreessen Horowitz invested $15 million in MakerDAO

33% Increase

 


CONCLUSION

Maker was one of the first projects to obtain significant recognition in the DeFi industry and is successfully run by the community of MKR owners. The Maker gives users the opportunity to have a say in managing one of the largest currencies on the market and encourages them to vote responsibly - if the ecosystem is governed too well, the MKR supply will be burned, thus increasing the Maker price.

The Maker intends to increase adoption and further distribution in the future. This means promoting the use of its stablecoin, Dai, in all the many industries and business products beyond DeFi. Other potential benefits include charities, games, forecasting markets, and cross-border transactions in international business. Maker is a rare project that brings to it both real-world use and its promise of growth and innovation.


DISCLAIMER

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto products are currently unregulated and subject to market risk. Please seek independent financial advice or do your own research before investing.