Maker and DAI: DeFi Royalty

Maker (MKR)

What is Maker?  

Maker is one of the first projects to present what would later become the decentralized finance (DeFi) ecosystem. It allows users to lend and borrow crypto without needing to do background checks or KYC. It consists of the MakerDAO and the Maker Protocol. The DAO is a Decentralized Autonomous Organization that was formed in 2015, while the Protocol is a smart contract.

The Maker ecosystem has two tokens, MKR and DAI. MKR gives voting power in the DAO, while DAI is a dollar-pegged stablecoin. The stablecoin allows you to transact within decentralized finance to a stable currency so when you borrow or lend your investment/collateral do not fluctuate wildly in price.

Why does Maker have value?

Maker is very useful as a gateway to the rest of the DeFi ecosystem. Since DAI is supported by different chains, like BSC, Fantom, or Avalanche, besides Ethereum, it can be used as collateral for loans on other protocols. Its price stability also makes it valuable as a payment method or in staking platforms.

What are the benefits of Maker?

●       It is a decentralized stablecoin unlike USDT or USDC, which are governed by centralized entities.

●       Holding MKR gives voting power in protocol decision.

●       DAI can be used to participate in other DeFi protocols outside of Ethereum.

What are the disadvantages of Maker?

●       Since it is mostly backed by other volatile cryptocurrencies, price swings can impact its stability.

●       Lend/Borrow protocols could become targets for regulators in the future.

What are MKR and DAI’s tokenomics?

Neither MKR nor DAI have a capped supply. Instead, the circulating supply varies on the needs of users. DAI can be issued by network participants, while MKR is either generated or burnt to keep the price of DAI stable.

Who founded Maker?

Rune Christensen, a Danish scientist and entrepreneur.

Who are Maker’s investors?

The MakerDAO has conducted 7 funding rounds, where it has raised $54.5 million. It has received funding from big crypto investors like Andreessen Horowitz, Polychain, and Paradigm, as well as other firms, like Bloccelerate, Dragonfly Capital Partners, Placeholder, ICONIUM, Walden Bridge Capital, Scanate, and 1confirmation.

Concise Crypto Grade:

A-  :MakerDAO, MKR, and the DAI token all play key roles in the overall growth of DeFi. For that reason alone, we are huge fans of Maker. DAI has been one of the trusted and true stablecoins that has kept is peg (for the most part) and been usable for years within the Ethereum ecosystem. DAI is still one of the most used and most popular decentralized stablecoins and should continue to have a long run into the future.

Where can I buy MKR?

Coinbase, Binance, FTX, Huobi Global, Gemini.

What ecosystem does Maker and DAI run on?

Ethereum