Maker is a protocol that uses smart contracts to issue Dai, a stablecoin pegged to the US dollar. Dai is a very unique stablecoin that is backed by cryptocurrency collateral. Users deposit their cryptocurrency to mint Dai tokens. In order to get their cryptocurrency back, users must return the Dai tokens back to the system. The Maker protocol is managed by the MKR holder community through MakerDAO, a decentralized autonomous organization. The MKR token was first issued in August 2015, and the Dai stablecoin made its debut on the Ethereum mainnet in December 2017.
How does the MKR token work?
MKR tokens are used to vote on decisions for MakerDAO, the decentralized autonomous organization that manages the Maker protocol. It also serves as a governance token for the Dai stablecoin. The MKR token will be used in governance decisions because it represents ownership of the system.
The MKR token has two uses:
- Voting rights for DAI system decisions.
- Ownership stake for MKR holders, who are entitled to rewards collected from trading fees collected by DAI markets.
Users can transfer their MKR tokens to other users or trade them on crypto exchanges. Tokens can also be destroyed by sending them back to the smart contract that issued them, which removes them from circulation and decreases supply.
MKR is an ERC20 token. Keep in mind that it is always important to keep your tokens safe in wallets with reliable security features like 2FA authentication and encrypted servers.
Conclusion
Maker is a blockchain platform that is powered by the MKR token. Once you have MKR, you can trade it on cryptocurrency exchanges, use it to pay transaction fees to the system, or as a collateral for issuing your own digital tokens.
Maker offers a decentralized platform for trading tokens with low transaction fees and high liquidity.
