Maker is an Ethereum token that describes itself as “a utility token, governance token, and recapitalization resource of the Maker system.” The purpose of the Maker system is to generate another Ethereum token, called Dai, that seeks to trade on exchanges at a value of exactly US$1.00.
How does maker crypto work?
To enable the process of borrowing and lending to flow seamlessly, Maker DAO uses the Maker protocol to borrow against collateral. However, unlike traditional loans, which tend to accept fiat currencies as collateral, Maker allows its users to borrow against multiple crypto pairs, which the protocol supports.
What crypto is MKR?
Maker Maker (MKR) is a cryptocurrency on the Ethereum blockchain designed to minimize the price volatility of its own USD-pegged cryptocurrency, DAI. DAI has a monetary value of one USD. Through the MakerDAO system, users can create Collateralized Debt Positions (CDPs) and use Ethereum as collateral to generate DAI.
How does MakerDAO make money?
MakerDao employs a global system parameter to determine how much Dai holders earn on their savings. The platform has another token, MKR, which serves as the governance token. MKR holders mitigate Dai’s price instability whenever the market price deviates from the target price.
What collateral does Maker accept?
Ethereum To transact a Dai stablecoin loan through MakerDAO, you can deposit any Ethereum-based asset as collateral as long as it has been approved by the MKR holders who govern MakerDAO. Examples of approved collateral include ETH, ZRX, and OMG, among many others.