Let’s discuss what is Cryptocurrency MakerDAO(MKR).
The digital platform has benefited every sphere of digital space as well as it is equally beneficial in the physical world. The advent of cryptocurrency is a blessing to the physical being to enjoy their existence in the digital space. Everyone that knows cryptocurrency and other digital assets knows how sensitive the price variation of crypto coins is. Many scholars and researchers have invested their dear time in the study of this volatility but nothing comes in return. Bitcoin mining is best started using the Bitcoin Loophole.
The question of volatility remains and the prediction is next to impossible. There is a class of cryptocurrencies and digital coins that do not have volatility to this extent and this class of digital assets is known by the name stablecoins. In this article, we are going to learn about one of the stablecoin maintaining platforms known by the name of MakerDAO. We will learn about the background, its benefits and advantages to the digital world and physical world, and many more. So, let us start the journey.
Governance protocol
MakerDAO is considered an organization from the concept of governance that has the capability of maintaining and developing stablecoins and other Decentralized applications. The decentralized organization that has an autonomous nature has a background in blockchain, so is decentralized. This platform of MakerDAO has the collection of investors holding the token related to this community and thus helps in the development of directives related to this community. It uses the technology based on Ethereum and has the smart contracts collected in one place. There is an exchange of currency values between an investor and the collection center of this MakerDAO’s chest of money aka vault.
Thus, the three basic features of MakerDAO are first the collection of token holders, second the Ethereum based blockchain holders, and third and final the decision to get more or less in return when the proposals for voting are there.
Development of MakerDAO
A businessman from Danes founded this platform in the year 2014. The businessman named Rune Christensen joined hands with Wouter Kampmann and developed this technology platform. The investor involved in this game was Mariano Conti. Christensen in the year 02015 came up with the concept of e-Dollar and the journal that published this information discusses another entity as well known as Maker that he referred to as the guardian in same journal. The developments did not stop here but in 2017, the protocols related to maker came into being. The funding to back up this platform increased manifolds because the number of investors increased in this field-backed up this platform.
Also read: How to create a DAO? | The ultimate DAO starter guide
Working of MakerDAO
The working of Maker seems to be simple but has different aspects that consolidate the whole process as somewhat complex. The first step in the generation of DAI is the investment in cryptocurrencies. The investment is not haphazard but the user has to deposit the economic asset in the vaults of the platform. The vaults act as the kind of wallets that hold the assets without custody that is they are non-custodial. After the proper cryptocurrency has been deposited. A user is eligible to generate smart contracts through the tokens. In return for the service provided, the platform charges a nominal fee in the form of a stability fee. Nothing is hidden but is stored on the blockchain of Ethereum.
Advantages of using MakerDAO
The first and foremost benefit of using this platform is the holdings in the form of stablecoin which has the least possibility of changes in the prices as well as holding costs. Secondly, the security is provided by the Ethereum blockchain so it is unquestionable. In the end, but not the least important is the capability to hold such a large crowd. It easily and efficiently manages to hold and regulate traffic on this platform.
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