There are cryptocurrencies that were not born alone but have been accompanied by innovations such as the development of environments and platforms focused on the use of Blockchain technology. We find this in Maker and Dai, one of the options that have most surprised the market.
And it is that Maker, a platform of cryptocurrencies and Blockchain, has not arrived alone but has done it accompanied with two cryptocurrencies, that's right Two! This tech trio seems to be a real revelation on the market. That is why here we will tell you everything you need to know about Maker and Dai.
▶ What are Maker and Dai?
As we already anticipated you, Maker is a platform responsible for the launch of Maker (Makercoin) and Dai. It could be said that MRK is a governance cryptocurrency, since it serves to regulate Dai, the virtual currency designed to be used as a form of payment.
Both cryptocurrencies arose from the need to create a cryptocurrency that is much less volatile and that, also, have dollar backing. This in order to surf on market fluctuations and thus avoid abrupt falls in value.
The way to understand Maker and Dai is that they operate under a symbiotic relationship where the main objective is to make Dai reach a 1 to 1 parity with the dollar. For this, Maker is used as a control currency, as well as interest rates to stabilize its price.
Similarly, Maker, the platform responsible for both virtual currencies, has focused on attracting investors who trust the stability of these currencies. This with the aim of ensuring that transactions such as savings accounts or loans are made in Dai in the future.
▶ The Maker and Dai process
It all starts with the creation of a smart contract called CDP (collateralized debt position). In this contract, users will send Ether cryptocurrencies which serve as collateral for Dai, this deposit will allow you to receive and create DAIs. All according to the amount of Ether deposited.
This process created a kind of exchange rate in which we have that 66 Dai equals one Ether, which, in turn, equals $ 1. To prevent a crash in the value of Ether from affecting Dai, Maker enters the game as a regulator by liquidating the Ether before the price falls below Dai.
▶ Differences between Maker, Dai and Bitcoin
- Back: The first difference we can find is in the support that each coin receives. Dai is backed by both dollars and Ethers, as well as MakerCoins. Bitcoin is only backed by its Blockchain.
- Amount of coins: One of the weak points, relatively, as this serves as a kind of control, is the fact that Maker has a much more limited amount of coins than Bitcoin, Dash or any other popular cryptocurrency on the market.
- Block chain: Another feature is that Maker does not have its own Blockchain nor does it operate without one, this because it uses the Ethereum Blockchain as its base. This, of course, with its respective adjustments such as the use of its own algorithm and the integration of two cryptocurrencies in one platform.
- It has no purpose of its own: Maker does not work for herself, rather she works for another currency, Dai. And it is that unlike Bitcoin that operates to gain value in the market, Maker operates to keep Dai regulated and stable.
- Safety: Another characteristic that we can find is that security is not found in the blocks or in external processes or protocols. They are the same users who are responsible for validating the security of the cryptocurrency. This by approving transactions made with other cryptocurrencies.
- Symbiosis relationship: Also, you should know that without Maker there is no Dai and without Dai there is no Maker. This because of Both cryptocurrencies are responsible for working together to ensure the stability of Dai. As we already mentioned, we find governance and emergency mechanisms in which Maker is in charge of protecting Dai.
▶ Technology behind
To function attached to the Ethereum Blockchain, Maker and Dai operate through an open platform system which is decentralized. In addition, a Peer-to-Peer protocol is indexed which guarantees the equality of nodes and the execution of smart contracts.
The Maker and Dai coins work through the Ethereum ERC20 Token, one of the most used as a basis for different cryptocurrencies. This helps make your exchange much easier by making them compatible with the 20 most used cryptocurrencies according to the Benchmarks or benchmarks index.
The mining of both Maker and Dai is somewhat peculiar. This is because the Makercoins are generated when it is necessary to stabilize the value of Dai so that its mining is not constant. In this way, the miner does not receive a commission for validating MKR transactions.
Chen there is a greater demand for Dai, more Makercoins are also required which makes the miner earn commissions for the production of MKR which entails the production of DAI. This is a bit complex, although we have the support of knowing that Makercoins also serve for voting on risk parameters for smart contracts.
▶ How to get it?
As you have seen, mining Dai is impractical or simple, unless the demand for Dai rises, thus forcing Maker to mine. Otherwise, the best option to have these cryptocurrencies is to buy them.
Nowadays both Maker and Dai are not that popular or occupy high Tops which makes finding them a bit difficult. There are few exchange houses that offer this type of currency, so it is advisable to carry out a deep search before making a transaction.
Financial analyst and economist with a master's degree in finance.