All of us are aware about the fluctuating market of cryptoassets. Due to this uncertainty, the concept of stable coins has gained prominence. Stable coins are essentially crypto coins with lower volatility and are stable in comparison to other crypto coins. MakerDAO is one such platform which consists of a stable coin. The stable coin of this platform is called ‘Dai’, with the value of its one unit being one dollar. Dai Stable coin system has created Dai using the Ethereum Blockchain and its value is backed by either tokens or assets.
Dai is the first product of the company Maker which has been into operation for the past three years. MakerDAO is a decentralized platform working on the dynamic system of collateralized debt positions (CDP) and the token, Dai is made available to users with the help of smart contracts. The CDP software runs on the blockchain network, here the Ethereum Blockchain network.
The stable coin ‘Dai’.
Now, how do you get Dais? You enter the Maker platform and leverage your Ethereum assets for generating Dais according to your asset’s value. After this, they can be used just like any other cryptoasset with the best part being that a Dai will not change its value by a large margin unexpectedly.
The company has released another token called MKR which is yet another volatile token. According to the creators, MKR serves three purposes; it is a ‘utility, recapitalization and governance token’ of Maker. Being a utility token helps Maker to recapitalise the CDP system. It is a governance token because it can be used by the MKR holders through voting for risk management. The power of recapitalization is utilised at times of unexpected situations when automatic recapitalisation occurs by creating and selling MKR coins in market.
The company has become the first one to launch working stable coins and though the project it still at its nascent stage, it does hold a bright future.