Eliminating the necessity to trust a centralized organization and the hassle of third-party audits, Maker offers a transparent stablecoin system that is fully inspectable on the Ethereum blockchain.\u00a0<\/span><\/p>\n <\/p>\n The Maker Platform has two coins: Makercoin (MKR) and Dai (DAI).<\/p>\n Makercoin\u00a0<\/strong>– A token with a volatile price that is used to govern the Maker Platform<\/p>\n Dai\u00a0<\/strong>– A price stable coin that is suitable for payments, savings, or collateral<\/p>\n Due to their immense volatility, normal cryptocurrencies are not ideal for any form of direct payment or use as collateral. To prevent huge fluctuations\u00a0in value, stablecoins are needed to mitigate the market risk of mercurial crypto-assets.<\/p>\n Maker covers four broad markets that could benefit from the use of Dai.<\/p>\n MKR has three essential roles on the Maker Platform:<\/p>\n You can only use MKR to pay the fees accrued on CDPs that generate Dai in the Maker system. When you pay fees, the MKR is \u201cburned\u201d or removed from the supply. MKR supply will decrease as MKR is burned. If demand for Dai and CDPs increases, the demand for MKR should also increase.<\/p>\n MKR holders use the token to vote for the risk management and logistics of the Maker system. Maker\u2019s voting process is done through continuous approval voting.<\/p>\n Continuous approval voting –<\/strong>\u00a0Every MKR holder can vote for any number of proposals with the MKR he or she holds. Any MKR holder can also submit a new proposal. Voters can withdraw or cast votes for any proposal at any time. The proposal that has the most votes from all MKR holders becomes the \u201ctop proposal\u201d and can be activated to implement changes to the risk parameters of the system.<\/p>\n If parts of the collateral portfolio become under-collateralized, the Maker system automatically creates new MKR tokens and sells them on the market. This instantly raises money to capitalize the shortfall of value in the system and brings the entire Maker system back from insolvency. Bad governance will result in the value of all MKR tokens becoming diluted. This creates a penalty system that should align Maker voter’s\u00a0interests with the interests of the entire Maker system.<\/p>\n [thrive_leads id=’5219′]<\/p>\n For a user to interact with the Maker System, he or she must first create a collateralized debt position.<\/p>\n To create Dai on the Maker Platform, a user must leverage his or her Ethereum in Maker\u2019s unique smart contracts known as Collateralized Debt Positions (CDPs). Although CDPs generate Dai for the user to use, they also accrue interest over time known as the \u201cStability Fee\u201d.<\/p>\n Currently, Pooled Ether (PETH) is the only collateral type accepted on the Maker Platform. In order to obtain Dai from a CDP, a user must first convert his or her Ether to PETH.<\/p>\n User interaction with a CDP has four basic stages:<\/strong><\/p>\n MKR holders vote on four key risk parameters\u00a0for CDPs to ensure the stability of the Maker System:<\/p>\n The Maker Stablecoin System uses external market factors and economic incentives to peg Dai to the value of a dollar.<\/p>\n Dai’s Target Price has two primary functions on the Maker Platform:<\/p>\n In case of severe market instability, the Target Rate Feedback Mechanism (TRFM) can be automated. When turned on, the Dai Stablecoin System adjusts the Target Rate in order to stabilize Dai’s market price closer to the Target Price.<\/p>\n Engaging the TRFM breaks the fixed peg of Dai to the US dollar but changes the Target Rate to incentivize market participants to keep the price of Dai at the Target Price.<\/p>\n If the market price of Dai is below the Target Price, TFRM will increase the Target Rate.<\/p>\n An increase in Target Rate causes Dai generation to become more expensive. At the same time, an increased Target Rate causes the capital gains from holding Dai to increase. Increased capital gains will stimulate Dai’s aggregate demand.<\/p>\n An increase in Target Rate will reduce the supply of Dai while simultaneously increasing the demand for Dai.\u00a0<\/strong>Basic economics should cause Dai’s market price to increase back towards the Target Price.<\/p>\n If the market price of Dai is above the Target Price, TFRM will decrease the Target Rate.<\/p>\n A decrease in Target Rate causes Dai generation to become less expensive. At the same time, a decreased Target Rate will lower capital gains associated with holding Dai. Decreased capital gains will decrease Dai’s aggregate demand.<\/p>\n A decrease in Target Rate will increase the supply of Dai while simultaneously decreasing the demand for Dai.\u00a0<\/strong>Basic economics should cause Dai’s market price to decrease back towards the Target Price.<\/p>\n The stablecoin system’s sensitivity parameter determines the magnitude of Target Rate in response to any change in the market price of Dai.<\/p>\n Anytime the Sensitivity Parameter and the Target Rate are both equal to zero, Dai will be pegged to current Target Price.<\/p>\n A decentralized last choice option, global settlement guarantees Dai holders receive the Target Price in case of dire emergency.\u00a0 Global settlement slowly shutdowns the entire Maker system and ensures all users receive the net value of assets they are entitled to.<\/p>\n For a global settlement to occur, MKR voters must vote on the situation to ensure a system shutdown is truly necessary. Some cases that may merit a global settlement include long-term market irrationality, a security breach, or system upgrades.<\/p>\n No system is perfect. Maker outlines its biggest risk factors in the implementation of its platform. It also lists its actions to mitigate these risk factors.<\/p>\n As Dai is soft-pegged to the price of one U.S. dollar, it’s not meant for trading. To generate Dai, download an Ethereum browser such as MetaMask<\/a> and surf over to the Dai platform<\/a>.<\/p>\n MKR was initially sold in a public forum and had multiple private offerings before moving over to\u00a0Openledger<\/a>.\u00a0 Currently, MKR and Dai are sold through the Oasis Decentralized Exchange (OasisDex).<\/p>\n To connect to OasisDex, open an Ethereum browser and navigate to OasisDex<\/a>.<\/p>\n MKR currently has a circulating supply of 618,228 out of a total supply of 1,000,000.<\/p>\n Both Maker and Dai are standard Ethereum Tokens adhering to the ERC-20 standard. Therefore, Maker and Dai must be stored in an ERC-20 compliant wallet such as MyEtherWallet<\/a>.<\/p>\n Offering better security than software wallets, hardware wallets such as the Ledger Nano S<\/a>\u00a0and\u00a0Trezor<\/a> are generally the safest way to store ERC-20 standard tokens.<\/p>\n The first fully decentralized stablecoin on Ethereum, Dai officially went live on December 18th, 2017.<\/p>\n In the next six to twelve months, the Maker Platforms plans to expand the number of collateral types that can be used to generate Dai. At this moment, only Pooled Ethereum can be used to create CDPs and make Dai.<\/p>\n Maker’s development roadmap is quite aggressive and focused on the widespread adoption of Dai over time in multiple blockchain<\/a>\u00a0applications.<\/p>\n Founded almost three years ago, MakerDao has quickly grown from a tiny team to over thirty-five team members. MakerDao is lead by Rune Christensen, its CEO and founder.<\/p>\n With the veracity of Tether’s dollar reserves in question, Maker’s Dai provides a viable stablecoin substitute. Maker has created fully inspectable and transparent stablecoin system that is truly decentralized and trustless. The entire blockchain ecosystem should benefit from the launch of Dai.<\/p>\n For additional information, check out MakerDao’s website<\/a>\u00a0and its whitepaper<\/a>.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Learn about Maker, the smart contract platform that controls and sells Dai stablecoin. Dai is Ethereum’s first fully decentralized stablecoin<\/p>\n","protected":false},"author":37,"featured_media":6226,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"iawp_total_views":17,"footnotes":""},"categories":[5714],"tags":[5809,5836],"class_list":{"0":"post-6099","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-articles","8":"tag-maker","9":"tag-smart-contracts"},"wppr_data":[],"yoast_head":"\n![\"Maker](\"https:\/\/coincentral.com\/wp-content\/uploads\/2018\/02\/Maker.jpg\")
<\/p>\nMaker’s Dual Coin System<\/h2>\n
Comparing Dai With Tether<\/h2>\n
Similarities<\/h3>\n
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Differences<\/h3>\n
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Why Stablecoins Are Needed<\/h2>\n
Dai Stablecoin Uses<\/h3>\n
\n
![\"Maker](\"https:\/\/coincentral.com\/wp-content\/uploads\/2018\/02\/Maker-Homepage.jpg\")
<\/h2>\nMKR Essential Functions<\/h2>\n
1. Utility Token<\/h3>\n
2. Governance Token<\/h3>\n
3. Recapitalization Resource<\/h3>\n
How the Maker System Works<\/h2>\n
Collateralized Debt Positions<\/h3>\n
\n
Risk Parameters of CDPs<\/h3>\n
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Price Stability Mechanisms<\/h2>\n
Target Price<\/h3>\n
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Target Rate Feedback Mechanism<\/h3>\n
Market Price Falls Below Target Price<\/h3>\n
Market Price Climbs Above Target Price<\/h3>\n
Sensitivity Parameter<\/h3>\n
Global Settlement<\/h3>\n
Maker Platform’s Risk Factors<\/h2>\n
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Fundraising and Trading<\/h2>\n
How to Store Makercoin and Dai<\/h2>\n
Product Development<\/h2>\n
![\"Maker](\"https:\/\/coincentral.com\/wp-content\/uploads\/2018\/02\/Maker-Pipeline.jpg\")
<\/p>\nMaker Team<\/h2>\n
![\"Rune](\"https:\/\/coincentral.com\/wp-content\/uploads\/2018\/02\/Rune-Christensen.jpg\")
<\/p>\nConclusion<\/h2>\n