Maker sets out to address the key weakness of many crypto coins - their volatility. Since wild fluctuations and price differences can put off many potential investors, Maker offers DAI, its stablecoin. DAI proves more “stable” and resistant to market fluctuations because its value is tied to the US dollar.
Maker cryptocurrency is operated by its own decentralized autonomous organization, MakerDAO, which is built on Ethereum and focused on borrowing and lending. Users lock up a certain amount of Ethereum in a Collateralized Debt Position (CDP) to borrow DAI. Users can generally borrow up to two-thirds of the Ethereum they lock up, and pay interest fees on the loans. Conversely, they can also lend their DAI to get earnings off the interest.
The other Maker token, MKR, is a governance token, and owning it gives you the right to vote on changes to the Maker organization as it grows and develops. It also supports the DAI’s stability.
When network fees are paid, some MKR tokens are burned, which means they’re more likely to remain at a higher value due to the balance between supply and demand. Burning ensures that the MKR tokens in circulation will never oversaturate, and decreases the chance of their value going down.
Maker’s stablecoin foundation allows your investments to be protected from gross fluctuation, positioning Maker as a good cryptocurrency investment for the risk averse. Savvy investors also can manipulate their Maker investments through smart lending to make additional earnings through interest.
If you’re looking for a stable, safer investment, Maker stands out as a great option. The MKR token helps keep the DAI stablecoin as close to $1 USD as possible. If the demand for DAI increases, more MKR will be burned in exchange. As a result, it’s unlikely that changes in supply and demand suddenly will devalue MKR coins.
As well, the Maker platform lets anyone take out low-interest cryptocurrency loans, without needing to provide personal information. That’s a stark contrast to bank loans, where borrowers must give personal details and pay exorbitant interest fees.
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