Maker Protocol or MKR (MKR/USDT – Trade it here) as known as the Multi-Collateral Dai (MCD) system. A Decentralized Autonomous Organization and open-source initiative on the Ethereum blockchain, MakerDAO was established in 2014. MKR is the governance token, held by individuals who are in charge of it globally. Many facets of the Maker Protocol are managed through a process called Maker Governance, which is organized and governed by the community. In this article, we will discuss everything you need to know about Maker Protocol and how to buy MKR tokens on MEXC.
Introduction of the Maker Protocol
It is one of the biggest decentralized applications (dApps) on Ethereum blockchain and the first decentralized finance (DeFi) application to achieve widespread popularity. Users can create currency on the protocol. The Maker Collateral Vaults, Dai stablecoin, and Voting are the existing components of the Maker Protocol. By using the voting power of holders of MKR, MakerDAO controls the Maker Protocol by deciding on essential things such as stability fees, collateral types and more. Holders of MKR oversee the Protocol’s stability, openness, and effectiveness as well as the financial risks associated with Dai. A vote is equal to one MKR token locked in a voting contract.
How does Maker work?
Through Maker Vaults, a type of smart contract, the Maker Protocol creates new Dai. These contracts can be made via a variety of online interfaces and applications, which essentially serve as gateways to the network. Users must first return the Dai they generated together with a stability charge in order to obtain their collateralized coin through the smart contract.
MKR tokens could be used for governance in Maker Protocol as well. Voting proposals utilize smart contracts that can be initiated from any Ethereum address. After that, MKR holders can vote on which proposal they would want to pass, and the Ethereum address that obtains the most MKR approval votes will be given administrative authority to implement the suggested change to the Maker Protocol.
What is Dai?
A decentralized, collateralized stablecoin that is pegged to the US dollar is called Dai. It may sound confusing, but the main idea is that it refers to a cryptocurrency that operates independently without a centralized authority and the price approximately pegged with the value of dollars.
In addition, Dai is unbiased due to the lack of authority. In other words, it is not managed by a private company, unlike USDT stablecoin. It is collateralized because only Maker Protocol users who deposit the necessary sums of other cryptocurrencies into a smart contract to back the newly issued DAI can actually mint new Dai. The Dai Savings Rate (DSR) will be used to calculate the interest rate that Dai holders can earn on their stablecoins via the Maker Protocol.
Holders of MKR can reduce price instability when the market price of Dai diverges from the Target Price due to shifting market dynamics by voting to alter the DSR accordingly:
- Market price of Dai is higher than 1 USD. The DSR can be gradually reduced by MKR holders. This would lower demand and should bring the market price of Dai closer to the target price of 1 USD.
- Market price of Dai is below $1 USD. Holders of MKR may decide to gradually raise the DSR. This would boost demand and should drive the market price of Dai up to the $1 USD target price.
How to buy MKR?
You can buy MKR on MEXC following the steps:
- Log in to your MEXC account and click [Trade]. Click on [Spot].
- Search “MKR” using the search bar to see the available trading pairs. Take MKR/USDT as an example.
- Scroll down and go to the [Spot] box. Enter the amount of tokens you want to buy. You can choose from opening a Limit order, a Market order, or a Stop-limit order. Take Market order as an example. Click [Buy MKR] to confirm your order. You will find the purchased tokens in your Spot Wallet.
MKR’s Role in Recapitalization
The MKR token serves as the Maker Protocol’s recapitalization resource besides Maker Governance. The MKR token supply may be increased through a Debt Auction to recapitalize the system if the debt of the system is greater than the surplus. This risk encourages MKR holders to coordinate and carefully manage the Maker ecosystem in order to prevent taking on too much risk.
Recent MKR Price & Performance
MKR reached the highest price (ATH) of 6332.9 USDT on May 3, 2021. The lowest price since the date of ATH was 582.2 USDT on September 21, 2022.
Interested in Crypto like MKR?
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