The DeFi Ecosystem
Decentralized Finance, also often referred to as DeFi, is the newest trend within the field of cryptocurrency. Following “Colored Coins,” Smart Contracts and ICOs, DeFi has been in the spotlight. The network has provided the way to a new field of decentralized technology. In the hundreds of projects focusing on the introduction of Decentralize Finance to the masses however none has achieved as much than MakerDAO Network. MakerDAO Network.
The Need for MakerDAO
The MakerDAO is a decentralized smart contracts platform built on Ethereum. It is among the largest and most community-driven DeFi initiatives in the market. One of the DAO’s primary tasks (Decentralized autonomous organization) is to support and maintain its token’s value, which is DAI. Canada Today Profit has a customer support team available 24 hours a day, seven days a week. The DAO operates with an ever-changing structure of Colllateralized Debt Positions (CDPs) and self-responsible feedback mechanisms, and appropriately compensated external actors to ensure liquidity. Fundamentally, Maker is a stablecoin platform with a variety of other functions. Maker lets anyone make use of their crypto assets to create Dai through Maker’s Maker Platform. This leverage can be utilized for a variety of purposes including getting loans, granting governance rights, developing applications that are based on stable coins such as. Once it is created, DAI can be used similarly to the other cryptocurrency. DAI is able to be sent to other people, used for payment for services and goods or as long-term savings.
It is important to note that the creation of Dai is also the source of the elements required for a reliable margin trading platform that is not centralized. DAI makes use of USD as an investment, is stable in comparison to the cryptocurrency market. Since the DeFi Ecosystem advancing, Maker aims to prove its position as the main player offering financial products using the Blockchain. Since the year 2016, Maker has been in continuous development, beginning with the first alpha test, SAI then moving to the fully-fledged DAI, and eventually to the different DeFi products. The project began with an idea to bring collateralized loans onto the Ethereum Blockchain, but since it has since gone on to offer a range of financial products, including governance protocol, exchanges that are decentralized managing tokens and many more. The MakerDAO is currently consolidating its status as the primary participant within the decentralized finance product market.
Characteristics of the MakerDAO
As per the White document, “The founders of the Maker community have established a prudent governance roadmap that is appropriate for the needs of agile development in the short term, but also coherent with the ideals of decentralization over time.” In this reason, it’s essential to identify the strengths that make up the Maker Network to ensure that we can study the potential applications later.
Maker Tokens
Tokenization refers to the process of replacing an asset that is tangible or not with a digital version to identify, transfer and storage. Tokenization is becoming the most popular trend in the Blockchain sector. To aid users in easy navigation on the platform Maker has launched three distinct tokens:
- MKR The token that is the native that is part of the Maker platform. The Maker community is primarily there to serve as a decentralized counterparty of Maker Team. Maker Team. It’s a loose group of actors who are independent and having MKR, the MKR token, which provides them with an incentive to help it succeed. Maker Platform succeed.
- DAI Dai Stablecoin System – Dai Stablecoin System was designed to address the issue of a stable exchange of value within the Ethereum ecosystem as well as the larger blockchain economy.
- SAI SAI SAI is the test branch that is part of the system. Users who want to interact with the network, and possibly create applications for the network. SAI is an enduring cryptocurrency that is used to test features and conduct beta tests.
DeFi Products
Governance
Governance-based applications are built via the network. This can be done at the system level via the selection for an Active Proposal MKR users or through tokens distributed through Maker. Maker platform.
Migrate
It could be used to assist tokenized SAI move to the in-house Maker network. The Maker network can then be used to develop applications that perform well on an environment that is focused on stability.
Oasis
Oasis is a free decentralized exchange. We say loose because there are no predefined options that are available on Oasis. There are no fixed features for the Oasis platform. Users can utilize Oasis to trade and save, to leverage, and even borrow.
Ecosystem
Applications that use Maker to function and run are part of the Ecosystem. Through the years, hundreds of apps, including extremely popular ones, have been able to make use of Maker as their Maker Platform. For instance, OKEx, Argent, InstaDapp are but a few of the many applications that make use of Maker.
Global Settlement
Global Settlement Global Settlement feature is built as an emergency measure. The feature can be initiated by the MKR stakeholder tokens for stakeholders whenever they feel the network is at risk. It is crucial to protect the money of DAI holders as well as users DAI. A situation of emergency, such as hacks to the network, market irrationality or security breaches. could trigger for the system to settle account balances and pay the money to users.
What are the possibilities with MakerDAO? – Use Cases
CDPs
Anyone with collateral assets can use these assets to create Dai through Maker’s Maker Platform through Maker’s unique smart contracts, also known by the name of Collateralized Credit Positions. In the present, any user who wishes to create CDPs must increase the collateralization by 150 percent. That means for every $150 of ether that is deposited as collateral 100 dollars worth of Dai is minted. The collateral margin is created to safeguard Dai holders from the possibility of a negative equity situation. Active CDPs are secured with excess value, meaning that their collateral amount is more than the debt amount.
Multi-Collateral Loans
In 2017 when the first beta test of DAI was made public it was only able to support collateralized loans on Ethereum because it was built around the Ethereum chain. The DAI network later expanded to accept over half dozen tokens, and diversify its offerings. Users can leverage leverage to get loans or to fund their everyday routine.