By now it is clear that Bitcoin (BTC) is the biggest cryptocurrency on the planet. It is also clear that there are few other digital tokens that are capable of unseating it from its number one position. But what is not so clear is whether BTC can hold its slot and if it does become overtaken, what will eventually make a credible challenge. One consideration as a potential challenger is Maker (MKR) a digital token that has been rising steadily in recent months and one which now definitely seems ready to take the next step.
But what is MKR? The token was created on the back of the Dai Stablecoin System, a system which itself is based on the decentralized platform which runs on the Ethereum blockchain. The key ingredient to MKR seems to be the emphasis on price stability. According to the developer website for MKR, Dai is a token that is stabilized against the value of the US Dollar. This gives the token the profile of stability but more importantly it allows users to have the confidence in the value of the token as they use it.
There is also a nuanced understanding of MKR and how it works with Dai that gives users and potential user a level of openness that is not quite present in many tokens. Dai is the actual stablecoin portion of the platform. MKR, on the other hand, is the price volatile element that gives users the opportunity to implement and engage knowing well what they are getting into.
The key to MKR’s flexibility is its usability and governance capabilities. As the main usability arm for the platform, MKR allows for rapid recapitalization of the Maker system. MKR serves as the main currency for servicing fees inside the system. These fees are generated as MKR interacts with the stablecoin. Underpinning the integrity of the system is a fully developed voting system which controls overall governance of the token. The voting process in terms of approval is continuous and every MKR holder is able to contribute to the development of the inputs (MKR’s owned by said voter). Each vote is tallied against a category of a type of vote called a proposal and the proposal that gets the most votes in aggregate is selected as the top proposal.
MKR’s emphasis on user control and governance is a robust mechanism for ensuring viability. In fact, this holds the key to the current uptick for as it was published on Medium.com in April 2015, “If MKR holders are highly competent and govern the system well, CDPs will always remain overcollateralized and there will be no threat of insolvency to the system.”
In recent weeks MKR has come more and more under the watchful gaze of the trading and investing community. Right now the token sits at the intersection of high-price growth and mass-acceptance and this has helped to propel the token into the public consciousness. In January 2018 the world got a chance to see MKR in action as it climbed rapidly up the price charts. At one point in January the token was trading at a whopping $1,687.86. A pullback on February 4 to around $840 hasn’t done much to dampen the optimism of investors either. Since then the token has risen back to reach high levels in terms of pricing. Currently MKR is hovering between $1,200 and around $900, making it one of the more intriguing cryptocurrencies available to the trading and investing public. It will definitely be interesting to see how traders and investors handle the expected growth in value for the currency that is aiming to revolutionize price-stability in the open blockchain.