As the scope of Defi is increasing in the world of cryptocurrency, some such projects have emerged which are challenging the entire traditional financial industry. One of these names is MKR. It is not just a token, but is a platform that allows loans to take and give without traditional banking system. In this blog, we will know what is Maker, how its ecosystem works and recently, what big changes have happened in it. If you live Maker Worth Want to know
What is Maker Ecosystem?
Maker (MKR) is part of an open-source project that runs an organization called Makerdao. Dao means Decentralized Self Sustaining Organization ie Organization that is run by token holders instead of any Central Authority.
Maker Protocol is built on the Etreum Blockchain. The most important feature of this protocol is that it allows users to create a stabilcoin named DAI. DAI is kept stable equal to the US dollar, but this stability is not fully controlled by a bank or physical dollar reserve but a fully control with a smart contract system. If you want to know that What are stablecoinsSo click on this link.
How does Maker Protocol work?
In this system, users lock their crypto assets such as ethereum in smart contracts called collecturazed Debt Positions. Instead, they can generate Dai Token equal to the value of those crypto assets. This process is like taking a loan from a bank. The only difference is that there is neither a bank nor any person who is checking your file. If the user returns DAI, he can get his cryptocurrency back by giving a small balance charges (which is like interest).
This system is fully dysmented and no Central Authority decides its regulations. All the decisions are from the voting of MKR token holders.
Role of mkr token
MKR is not a stablecoin, but it is a governance token. This means that people who keep MKR token get voting rights on the chains and policy in Maker Protocol. Voting power MKR token is disabled by holding. It is a Democratic working system that gives all users a chance of participation in the protocol.
In addition, MKR has an important role in risk management. If a time ever comes when the crypto kept for guarantee of DAI is not enough, new MKR tokens are made and sold to make up the deficit.
From Makerdao to Sky: A new chapter
In August 2024, Makerdao rebrands herself as Sky. Two new tokens were launched under this change:
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Sky (Sky): New governance tokens that replace MKR
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Sky Buck (USDS): A new stabilcoin that replace Dai
The objective of this rebranding is to make the protocol more future-redi, scalable and user friendly. Although MKR is still working, it may be merger in the Sky system in the coming time.
Conclusion
Maker and its ecosystem have emerged as a strong and stability option in the world of Defi. It is not just a crypto token, but a complete financial system that challenges the traditional defense of banking. The changes in this indicate how the project is molding themselves over time. If you want to invest or do research in defi or stabilcoin, Maker/Sky is a name that you should see.
