What Is The Maker Protocol?

The Maker protocol is a platform through which anyone across the globe can generate the DAI stablecoin against crypto collateral assets. MakerDAO is a decentralized organization that is dedicated to bringing stability to the crypto economy. The protocol employes a two-token system and the first one is DAI a collateral-backed stabelcoin that offers stability.

The Maker Foundation and community believe that a decentralized stablecoin is much needed to have any busienss to individual realize that there are plenty of advantages of digital money. There’s also MKR which is the governance token that is used by the stakeholders to maintain the system and to manage Dai. MKR token holders are the decision-makers of the protocol that are supported by the larger public community and other external parties.

Maker protocol is unlocking the power of decentralized finance for everyone by creating an inclusive platform for economic empowerment and thus enables everyone with equal access to the global financial market. With the new version of the protocol, the Multi Collateral Dai is released and live on the main Ethereum network so there are a few changes and features that have been made. The biggest one is that Maker now accepts any ethereum-based asset as collateral to generate DAI given it has already been approved by the holders and has been given specific, corresponding Risk Parameters via the decentralized governance process. There are a few other new features that came with the upgrade like the new Dai token, support for multiple vault types, the DAI savings rate, robust peg ensuing mechanisms, and stability fees paid for each block.

At the core of the new economic systems envisioned by cryptocurrencies are the values of decentralization and accessibility. BTC sprang from the frustration that was caused by the centralized and outdated financial system as the message embedded into its genesis contained a harsh message for the banks in the financial crisis of 2008. it even managed to establish a market around it but didn’t become an effective means of value transfer because of its volatility. That’s when stablecoins joined the race and most of them now found a strong degree of adoption like Tether which lacked decentralization and was issued by a single company.

MakerDAO exists to solve these problems as it is an open-source project on the Ethereum blockchain but also a Decentralized Autonomous organization carrying the same name. It was created in 2014 with a goal to bring economic ecosystems powered by a currency that will be stable and decentralized.