Cryptocurrency Maker. The first stable asset in the cryptosphere

Cryptocurrency Maker
In 2022, few people will be surprised by the fact that Bitcoin is the most expensive cryptocurrency. The news covers it, and the course is talked about by the world media. But which digital asset is in the TOP 4 by value?

It is the Maker cryptocurrency (MKR). In this article we will tell you what technology the company offers, what kind of coin it is, and what prospects it has in 2022.

• What is Maker
• What is DAI and why is it needed?
• What is MKR token
• Maker rate and capitalization
• Where to buy MKR and how to store
• Maker 2022 forecast and project prospects

What is MKR?

Today we will talk about what Maker cryptocurrency is and how it differs from others. MakerDAO is considered one of the important startups for the crypto space. This is a decentralized toolkit for creating a stable token that allows you to maintain the value of a certain price threshold guaranteed by the design of the mechanism. In other words, this means that using MakerDAO you can create a token that is protected from severe exchange rate volatility.

A stable token like this, for example, will always be worth more than $1, allowing a person to store their funds in such stable tokens instead of the risks that recently affected the seemingly immovable giant Tether (USDT).

And like many of the best blockchain projects, Maker (MKR) is inherently complex and therefore requires extensive explanation to be fully understood.

MKR is a utility token with a little twist. To understand what it is, you first need to know what Stablecoin is, and how the MKR token, along with Dai, fit into this broad definition.

Extraction of cryptocurrency without mining and investments, through “faucets”

There are some ways through which you can mine BTC without using personal funds. The most popular method of collecting Satoshi is using Bitcoin faucets. These are sites where you can earn small portions of Bitcoin for performing simple actions.

Attention: this method has almost completely lost its relevance since 2022!

Such cranes are divided into:

• 5 minute;
• 10 minute;
• Half-hourly;
• Sentinels;
• Cumulative.

There are also so-called rotators, in which several faucets are collected at the same time, since this is much more convenient for collecting satoshi. On an automatic machine, you can collect cryptocents in this way only by using special software that will imitate the user’s actions. In other cases, you will have to work manually: go to the faucet, perform an action, and make a profit.

Basically, users withdraw accumulated satoshis to electronic payment systems. However, the most experienced miners try to invest them in cryptocurrency mining. There are services where you can purchase a share of the power of other users’ equipment. For example, you earned money on Satoshi faucets, the same amount as 50 dollars. And now you have a choice: either withdraw them to an electronic wallet, or use and increase them by investing in mining. This opportunity is available to anyone who is ready to invest.

List of the most famous and profitable faucets for receiving Bitcoins:

• freebitcoin – coins can be received once per hour. Seven times in 24 hours you can participate in a free lottery with more significant prizes. To get started, you need to register by entering only your email and Bitcoin wallet address. Minimum withdrawal amount is 10 thousand satoshi;
• FreeBitcoinGame – has been operating since 2016. You can increase your income by inviting referrals and participating in the lottery, which can double the amount on your balance. You can receive a bonus every hour and the minimum withdrawal amount is 10,400 satoshi;
• BonusBitcoin is a relatively new resource that has quickly gained momentum and popularity. You can collect your reward every 15 minutes. If at the end of the day there is money left on your balance, then 5% is added to the total amount as a bonus. The withdrawal limit is 10 thousand satoshi;
• WheelOfCoin – here you can earn money on the machine. 500 Satoshi are credited 4 times a day. There are games for gambling lovers here, with which you can earn even more. When registering, you just need to indicate your Bitcoin wallet address and E-mail. Limit – 20 thousand satoshi;
• ClaimBTC – gives users 320 satoshi every 20 minutes. Also, when you visit the site, a small bonus will be awarded. Considered one of the best faucets.

You can find many faucets, there are even special monitoring systems that monitor their condition and highlight the best faucets.

What is Stablecoin?

In short, Stablecoin is a type of cryptocurrency that has a fixed value.

In the case of Dai, under the guise of Maker, it is a token that is denominated in US dollars, starting at 1 US dollar. That is, this means that Dai has a soft peg of 1:1 USD (but is not permanently pegged to the US dollar).

Until now, most stablecoins have worked similarly to debt documentation. That is, stablecoin developers keep exactly 1 dollar for each coin issued. However, critics see this as a flawed protocol since the coins are effectively bills of exchange, which are very similar to currency.

This results in the coin becoming more centralized and reliant on government-controlled currencies—an outcome that is quite unlike most decentralized cryptocurrency platforms currently operating in the cryptocurrency market.

Luckily, Dai exists as a stablecoin that is not strictly dependent on any other currency, and MKR is a volatile governance token.

Where can I buy Maker (MKR)

Today the token is presented on the following cryptocurrency exchanges:

• Okex;
• Bibox;
• Dragonex;
• Ethfinex;
• Bitmart;
• Gate.io;
• HitBTC;
• Gopax;
• Radar-Relay;
• Idex.

MKR coins cannot be obtained through mining, but can be purchased on exchange trading platforms.

How does Maker work?

Maker is a decentralized autonomous organization built on Ethereum, which powers the MKR token along with Dai.

This is a great example of how many impressive products and services people can create using the Ethereum smart contract platform. Essentially, Maker exists to reduce the volatility of the price of Dai against the US dollar.

For example, when you create 100 Dai coins with your Ether worth $150, the Ether will be tied to a Collateralized Debt Position (CDP), which is basically a program that allows a smart contract on Maker to deposit your capital.

Once you exchange your 100 Dai coins, you will be paid $150 worth of Ether, but the Dai will be “burnt” as part of the process.

Review: Cryptocurrency Maker

In 2022, few people will be surprised by the fact that Bitcoin is the most expensive cryptocurrency. The news covers it, and the course is talked about by the world media. But which digital asset is in the TOP 3 by value?

It is the Maker cryptocurrency (MKR). In this article we will tell you what technology the company offers, what kind of coin it is, and what prospects it has in 2022.

What is Cryptocurrency Maker

Cryptocurrency Maker is a cryptocurrency platform created in 2015 based on the Ethereum blockchain. The main goal of the project is to create a decentralized currency pegged to real assets such as the dollar, euro, pounds, gold, and so on. To put it simply, we are talking about so-called stablecoins.

Contrary to popular belief, the main cryptocurrency of the platform is not the MKR token, which we will talk about later, but the DAI cryptocurrency. This is a coin pegged to the dollar, and so far it is the only one created as part of the project (again, besides MKR). Its rate always remains at the level of 1 DAI = $1.

In the future, the developers of the Maker cryptocurrency are going to create a decentralized exchange, which will allow margin trading of various cryptocurrencies. So far, the project only includes ERC-20 standard tokens. Maker itself is a decentralized organization, which is why it is often called MakerDAO.

As for the MKR token, it was created for several reasons, firstly, to attract investment in the project, and secondly, MKR holders are something like shareholders who influence the ecosystem by making decisions through universal voting.

What is DAI and why is it needed?

You say - but there are already many stablecoins on the market - Tether (USDT), TrueUSD (TUSD), USD Coin (USDC), so what is the difference between DAI and all of them? In simple terms, the main difference lies in the mechanism for providing value.

There is even a name to explain this technology - collateralized debt position or CDPs. That is, each token is backed by a certain asset, which the client borrows from the system and then gives back. Moreover, all work is based on regulation using smart contracts.

In particular, in this way the Maker cryptocurrency solved the problem that Tether suffers from - it is simply impossible to issue tokens uncontrollably on the platform. And this is also one of the reasons why the MKR token was created, because the platform needs “fuel” to function.

In fact, CDP is the same margin trading that was mentioned earlier. Be careful, because when working with CDP, everything is not at all easy - the system has its own tricks. More information about the technologies used on the Maker platform can be found in the project’s WhitePaper.

What is the MKR token and why is it needed?

MKR is the second Maker token. He is responsible for the operation of the platform itself and ensures its operation by fixing the cost of DAI. It is also used to invest in a project.

And if the cost of DAI is almost always equal to one dollar, then the MKR rate fluctuates greatly, which provides an opportunity for traders to make good money on it.

MKR features on the MakerDAO platform:

• Commissions for transactions and redemption of collateral are paid in MKR tokens;
• Users who have MKR make global decisions on the future fate of the platform. Moreover, the more coins in the account, the more significant the vote of such a shareholder;
• Using the MKR token and complex algorithms, the development team managed to achieve fluctuations in the DAI rate within 5%, which is the norm even for traditional financial instruments;
• MKR is used as a means of recapitalization. That is, if an error is made in the system and excess funds are debited from the account, the program will automatically replenish them.

The Maker (MKR) cryptocurrency will please investors, since the issue of the coin is small even compared to Bitcoin, and since its creation there have been many price fluctuations, which allowed some traders to make good money.

Maker rate and capitalization

The market capitalization of MKR is relatively small - $791,393,929 with a total issue of 1,000,000 MKR. And there will be no more coins; on the contrary, it is planned to burn tokens in the future.

The daily trading volume is $2,143,536, which is also very small compared to top cryptocurrencies. Despite this, according to CoinMarketCap, at the time of writing (late June), the price of Maker is at $791.39. And this is the second indicator after Bitcoin, which the coin has been holding for a long time.

All-time MKR rate Source: CoinMarketCap

Like most cryptocurrencies, peak values ​​occurred in January 2022, when the price of MKR reached $1773.92. At the same time, at the time of creation on January 30, 2022, the token was trading at $21.06.

Since the coin is based on the Ethereum blockchain, its rate goes up when positive news about ETH, or more precisely about the technologies being implemented, appears in the news.

Over the past month, the value of MKR reached $802.51 and dropped to $645.05. In the CoinMarketCap ranking, the token is in 24th position.

Where to buy and how to store

The coin is traded on many cryptocurrency exchanges, and the main pairs are: MKR/BTC, MKR/ETH and MKR/USDT. There are other trading pairs, but they are less popular.

Popular exchanges where you can buy Maker

And since the Maker cryptocurrency is an ERC-20 standard token, it can be stored on the most popular cryptocurrency wallets that support this format, i.e. on Ethereum wallets. Here are some common options: MyEtherWallet, MetaMask, Mist or Exodus. Also, these tokens can be stored on Ledger and Trezor hardware wallets - this way they will be more secure than on “hot” wallets.

Prospects for the Maker project

Decentralized stablecoin technology is quite in demand today, as it is one of the ways to integrate cryptocurrencies into business.

But today, investors are wary of the DAI token, but believe in the growth of the Maker cryptocurrency. The second is due to a small issue of a million coins, which will only become fewer over time. And, despite the fact that Maker is in 23rd place in terms of capitalization, the daily trading volume of just over $2 million is an extremely low figure compared to other altcoins from the TOP 20.

With all this, the Maker developers announced the completion of work on the platform, but in fact, in addition to trading on the CDP, they did not add the promised stablecoins in euros, yen and pounds. And the issue of DAI does not yet indicate trust on the part of users.

A strong argument in favor of Maker is the approval of Vitalik Buterin, the creator of the Ethereum platform. In one of his posts on Reddit, he called this cryptocurrency “part of the Ethereum ecosystem,” saying that he himself partially invests in it.

The advantages of the project are transparency, a high level of automation, a well-thought-out mechanism for creating DAI and stabilizing its price, as well as recapitalization using the Maker cryptocurrency if such a need arises.

In general, the Maker developers have achieved good results over the two years of the project's existence. According to them, in the future they intend to create even more coins, each of which will be tied to the main world currencies. For now these are just words; in fact, there is not even a “road map” on the site.

If we consider MakerDAO as an investment asset, then the MKR token is quite good for long-term investments. Now its rate is growing following Ethereum, but as new stablecoins are introduced into the platform, growth of this coin should also be expected. However, MKR, like other cryptocurrencies, is not immune to market declines, which cannot be said about the DAI stablecoin.

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How does the MKR token work?

Now that we understand the basic premise of the Dai token and how it all works, we can take a closer look at how the MKR token fits into the picture.

Maker operates as a governance or utility token that also functions as a recapitalization resource for the Maker network.

The utility aspect of MKR is based on the concept that it is the only token that can be used to pay CDP creation fees to create Dai. In fact, there is about 530,000 MKR in circulation and whenever it is used to pay fees, MKR is consumed and burned.

As more and more MKR is burned, its value will increase and transactions will take less time to complete.

The management aspect of MKR is based on its use for voting. MKR holders can vote for any solution proposed to modify the Maker network, or to create such proposals.

Votes are held regularly, and proposals put forward typically relate to risk control and safety parameters. There is also a delay between voting results and implementation to prevent bulk purchases of MKR for malicious voting. In this sense, MKR can be thought of as shares and ownership in the Maker community.

System and margin trading

Maker operates on the principle of margin trading. Dai tokens are backed by CDP - collateral for debt obligations, which are sent to a smart contract and serve as a platform for margin trading. This basis allows developers to provide affordable prices, as well as guarantee a high level of security.

Since the system combines a large number of elements: the Market exchange, the Dai stablecoin, as well as the debt trading platform, it is able to provide excellent financial results - the ability to execute transactions for any person or company quickly, conveniently and safely.

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Maker also relies on its community of MKR owners to enforce its privacy policy and operates on the assumption that they will use common sense. This is where the final aspect of MKR as a recapitalization token comes into play.

If Maker performs poorly as a management tool, an automatic recapitalization will occur, resulting in insufficient collateral support for the CDP. In such cases, the Maker system will create additional MKR tokens that will be sold, raising capital for additional collateral. As a result, MKR is diluted and its value falls.

Avoiding this outcome is what motivates all MKR holders to play their role correctly, because if they don't, their position in the MKR network will lose value.

Development team

In accordance with information from the office. website, Maker shows that a huge team is involved in working on this project.

Not much is known about the project leader, Rune Christensen, other than what can be found in a few interviews. He portrays the image of a very level-headed and competent technical safety executive who is willing to take on new problems as they arise.

The leading development teams are CTO Andy Milenius, Lead Scientist Nikolai Mushegian, and Product Manager Soren Peter Nielsen. This leadership team collaborates to coordinate a multidisciplinary team of nearly 40 developers, business sponsors, and PR staff.

Example of using MKR and Dai

Stablecoins have a stronger argument for everyday use compared to traditional cryptocurrencies. The stability of the former allows them to be used in financial markets, such as money lending, where the lender or institution can expect to receive a fixed income.

Their potential for regular use in retail and commercial trading is also very strong compared to cryptocurrencies such as Bitcoin, which have significantly higher volatility.

While Bitcoin holders will be reluctant to use their funds for transactions for fear of missing any potential growth, stablecoin holders will know that their coin will still have the same value of $1 and tomorrow.

Dai, compared to other stablecoins, is truly the first decentralized stable token. It is safe to assume that users who start using stablecoins in the early stages of blockchain technology will most likely be crypto enthusiasts.

It is for this reason that many users tend to gravitate towards Dai and MKR respectively.

As the developer community grows and Dai becomes a reasonably useful cryptocurrency, the value of Dai should theoretically lead to an increase in the value of MKR as well.

Practical use

District0x team member PJ shared with us that he has been in the market for a new car for quite some time, but for numerous reasons. He had the opportunity to buy his dream car using his ETH to produce Dai and eventually receive USD for credit towards the new car. Additionally, PJ explains his thoughts on Dai:

“The ability to instantly receive a loan from a decentralized bank is a virtual manifestation of what makes crypto so promising and exciting. Using CDP in combination with DAI is a game changer for the space and for those who choose to take advantage.”

Here's his full story :

“I've been in the market for a new (used) car for quite some time, and I've spent the entire year for several reasons: 1) I have a sub 700 point, so interest rates will be high. 2) I didn’t want to “settle in.” I wanted what I wanted, and I was willing to wait for the right car to come along. 3) I didn't want to sell my ETH to buy a car (that would be stupid right?)

So fast forward to December of last year; my brother and I were sitting in the kitchen talking about Dai when we realized we could use a CDP to use my ETH, generate Dai and buy more ETH or (lightbulb...ding!) convert it to USD and use THAT as credit for a new one car. So instead of borrowing from the bank and getting robbed with high interest rates and dealership fees; I could just use the CDP against some of my ETH holdings, pull out the USD, and go buy a car with cash.

So I did. I am now the proud owner of a BMW 335i Sport Sedan which is funded by CDP using DAI and Ether. I'm falling more and more in love with crypto. You may need to look into the "THX DAI" vanity.

And you can read such different stories...here