Like some of the best Blockchain projects today, Maker is sophisticated to fully understand. The Maker cryptocurrency is implemented on the 2nd largest Blockchain network-the Ethereum network and is dependent on the concept of a smart contract.
MKR is Maker’s utility token. Rather than being backed by fiat currencies, the Cryptocurrency is backed by Ether. The Maker platform forms the basis of simple banking systems that are built of distributed ledger technology. It allows for easier international payments and P2P transfers.
In this piece, we are also going to delve on the DAI stablecoin which goes alongside MKR. DAI is a stablecoin made along with fractional reserve banking ideals linked to MKR. Its purpose is providing a safe haven for evasion of volatility that haunts today’s main markets.
Addressing Crypto Volatility With Stablecoins
To put the matter into perspective, the main objection to crypto acceptance is price volatility. And a review of Bitcoin prices over the last few years can testify to the fact that crypto markets are incredibly volatile. In as little as 12 months in the market, the prices have dived from over 17, 000 to below 5,000. The same has been experienced in other Cryptocurrencies in this bearish season. Mind you, the same has occurred on the Bull Run and prices have upsurged by incredible percentages.
Now, when such kind of market exists, users become a bit shy in spending their crypto tokens. Who would want to spend 10,000 in tokens on pizza today and see the value jump to over $100 million tomorrow? That’s why the Maker DAI was created- to address the issue of volatility.
Maker stands the most trusted stablecoin at the moment. Its rival, Tether (USDT) stablecoin is in the midst of a controversy. Regulators and critics doubt its backing by a fiat currency as its creators claim.
However, a report has surfaced proving that indeed it is being backed by dollars. But then again, since the report cannot stand the credibility of an audit, the claim still stands. Tether has also been heavily linked to BitFinex, an exchange that was allegedly used in the manipulation of bitcoin’s price in 2017. Either way, transparency is not as straightforward in Tether.
The Point Of Having Stablecoins
Price volatility has been an issue not just in the crypto space but for fiat currencies as well. The US dollar value in Yen is not the same as it was 40 years ago. It’s not even the same as it was 10 years ago.
Stablecoins like tether and DAI have values pegged on fiat currencies like the dollar. The pegging is to allow simpler international payments.
The Team Behind Maker
Maker website shows a massive team that is in collaboration on the Maker project. What’s more impressive is the level of technicality in expertise that is required for a project this size to be set in motion.
Maker’s CEO Rune Christensen has had quite a fair share of publicity. From his recent public interviews, his security consciousness and level-headedness betray the executive. You can tell he is more than willing to face any sort of challenge that presents itself.
When it comes to the front runners, the development team comprise of Andy Mileniuswo a0.s the CTO, Matt Richards, the President, Soren Peter Nielsen, the Head of Product and Nikolai Mushegian as the Chief Scientist. The team coordinates an interdisciplinary team of over 40 developers and PR staff.