A Stable Asset is All Maker (MKR) Asks For

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Maker (MKR) –Popular cryptographic currencies such as Ethereum and Bitcoin have prided themselves as the next global currency. What government in its right senses will issue permission for adoption of a currency that its price cannot be regulated?

The current crop of cryptocurrencies littering the world today have high volatility and this is one out of many reasons why they cannot be considered same way as fiat currencies. Analysts believe that cryptocurrencies will find their feet. When they go up and its exchange gets better shares in the market, investors rake in the rewardingly financial outcome but when the reverse becomes the case, the consequence is disastrous.

Volatility of cryptocurrencies can be likened to a penniless investor that staked his last coin at the end of the day’s crypto trades and wakes up the next morning a millionaire simply because trade took a great shape later in the day. What then becomes his fate when he stakes more funds when the trading goes south? Your guess is as good as mine.

Maker is Stabilizing Cryptocurrencies

As more altcoins come up, there is tendency that they cannot meet up with stiff competition in the big league where cryptocurrencies are holding sway. Maker is one out of many cryptographic currencies in the digital market that has hopes of getting recognized alongside the Dollar. Maker is developing what we known in the decentralized space as Stablecoin. Stablecoins’ concept is that prices remain constant and cannot be altered by trading.

This is perhaps sad news for leading fiat exchanges such as USD and EUR. In a world where acceptance of cryptographic currencies is literally outlawed, it will be a threat having one that can match powers with the likes of USD, EUR and GBP.

Maker (MKR) Fronts Dai as its Brainchild

Maker (MKR) might find its direct implementation hard and this informed the reason for floating a coin known as Dai. Dai was developed on the premise of stability and functions as Maker’s stable token.

Dai is backed by Ethereum collateral; making it possible for users that want to generate the Dai token to do so. Dai can be used same way as other cryptocurrencies. So it would be wrong to consider it an altcoins – it is rather a cryptographic currency in the making.

How Feasible can Smart Contracts be in Creating Stablecoins?

It is common knowledge that the smart contract technology is software in every blockchain that processes transactions and enables sufficient security on the chain. It is rare to find a smart contract that can be use for coin creation.

That’s what we have here on Maker (MKR) – creation of coins using smart contracts. Maker deploys a smart contract known as Collateralized Debt Positions (CDP). CDP comes in handy in the creation of Stablecoins such as Dai.

Creating a Stablecoin requires the participation of the Dai token holder and the smart contract – CDP. For a user to create Stablecoins, he has to trade his Ether token into the CDP smart contract. As its name implies, CDP serves as collateral means and will keep the user’s Ether token pending the end of the transaction.

Meanwhile, the Ether token has to be collateralized. On acceptance, CDP employs the use of collateralized ratio – issuing the user the equivalent Stablecoin (Dai) for his Ether token. The Stablecoin you got is considered as a loan and you’re expected to pay back at due time. If on the other hand, the value of your collateralized Ether token dwindles, you are mandated to pay up the loss sum or risk losing your token to someone other user when the platform decides on selling it off.

Maker (MKR) is Independent and Working the Way to Crypto Adoption

Maker does not limit its operations to creating currencies that will match fiat currencies especially the USD at the ratio of 1:1. Maker runs an independent system that is free from any intermediary.

For its governance, its token holders (MKR holders) are in charge. As the saying goes, he who pays the piper dictates the tune. MKR holders govern the platform and the Dai token. They also feature in global settlement – resolving disputes that arose from collateral disputes. Still on this, in the event of a non-consensus resolution of conflicts, Maker (MKR) token holders will lap up the remaining Dai tokens and refund its holders.

Maker’s Project is Unique

Maker brings to the table what many cryptographic currencies have failed to do – stabilizing the price of their currencies. By using its CDP smart contracts, users can convert their Ether token into the first-ever Stablecoin – Dai token. Maker is indeed a MAKER and with what it offers, it is worthy of consideration.

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