Maker: everything you need to know about MKR

What is Maker?

Maker (MKR) is a cryptocurrency developed by MakerDAO, a decentralized autonomous organization on the Ethereum blockchain. Maker is a crucial component of the MakerDAO ecosystem, as it is used as a governance token and to support the Dai stablecoin. MakerDAO was established to enhance the stability and decentralization of the cryptocurrency market, and the Maker token plays a significant role in achieving this goal. Maker possesses various unique features and applications, holding a prominent position in the cryptocurrency market.

How does Maker work?

The cryptocurrency Maker (MKR) plays a vital role within the MakerDAO ecosystem and the Dai stablecoin. How does Maker work?

• Collateral: Users can use MKR tokens as collateral to generate and borrow Dai, with MKR serving as collateral to ensure the borrowed amount is repaid.
• Governance: MKR holders have a say in MakerDAO's decision-making. This means they can vote on important matters, such as setting interest rates and managing the risk of the Dai stablecoin.
• Risk Management: When the value of Dai collateral drops, MakerDAO may sell MKR to offset the losses.
• Scarcity: There are only 1 million MKR tokens in circulation, contributing to the cryptocurrency's scarcity and value.
• Decentralization: MakerDAO is a decentralized autonomous organization, and MKR helps support this organization and the broader Maker ecosystem.

The Maker token

The MKR token acts as a governance token for MakerDAO and can be used as collateral to generate and borrow Dai. The token can also be sold to manage risks when the value of collateral fluctuates. Moreover, MKR is a scarce and valuable cryptocurrency, and MKR holders can earn rewards by contributing to the growth and development of the Maker ecosystem.

The Technology Behind MKR

The technology behind MKR is built on the Ethereum blockchain and utilizes smart contracts to manage the operation of MakerDAO and the Dai stablecoin. What are the important technical features of Maker?

• Collateralization Ratio: To generate and borrow Dai, a user must deposit a certain amount of collateral (such as ETH). This is called the collateralization ratio and is managed by smart contracts on the Ethereum blockchain.
• MKR Token: MKR acts as a governance token and is used to manage the risk of the Dai stablecoin. MKR is also used to determine interest rates for generating Dai.
• Stability Fee: MakerDAO determines a stability fee calculated based on the interest rates for generating Dai. The stability fee is paid in MKR and serves as compensation for node operators verifying the network.
• Oracles: To determine the value of collateral, Maker uses oracles that regularly check and report the prices of various crypto assets. This helps manage the risk of the Dai stablecoin.
• Decentralization: MakerDAO is a decentralized autonomous organization, supporting the decentralization of the organization and the broader Maker ecosystem through the use of smart contracts and oracles.

The Maker ecosystem

The Maker ecosystem consists of various components working together to support the operation of the Dai stablecoin. MakerDAO manages the Dai stablecoin and utilizes MKR tokens as governance tokens. Dai is the stablecoin issued by MakerDAO, and its value is pegged to the US dollar. Users can deposit various crypto assets as collateral to generate and borrow Dai, and oracles are then used to determine and report the collateral's value. MKR serves as a governance token and is used to manage the risk of the Dai stablecoin and determine interest rates for generating Dai.

Benefits of Maker

What are the unique advantages of Maker?

• Relatively stable value
• High liquidity
• A vast number of available apps and exchanges
• Various assets are suitable as collateral
• Connected to the Dai stablecoin

Drawbacks of Maker

What disadvantages of Maker should investors consider?

• Dai collateral can be influenced by other cryptocurrencies
• More volatile than stablecoins backed by fiat money
• Complexity of the system may deter beginners

Who is the founder of Maker?

The founder of Maker consists of a group of developers led by Rune Christensen. The group was later formalized into the Maker Foundation, a company based in the Cayman Islands.

Price forecasts

In 2027 experts expect a minimal price of €2,676.49 and a minimal price of €5,657.73 in 2032.