The Ultimate Due Diligence Report on MKR Token (MAKER Token)

The Ultimate Due Diligence Report on MKR Token (MAKER Token)

1. Executive Summary

Overview of the MAKER token and its unique value proposition.

MAKER (MKR) is a decentralized platform built on the Ethereum blockchain that aims to solve volatility issues for the crypto market. It has three main roles on the platform: it acts as a utility token, governance token, and a recapitalization resource. MKR is used to pay various fees associated with generating DAI, a stablecoin that maintains a stable value against the US dollar.

Brief summary of the investment opportunity

The platform uses a unique smart contract system called Collateralized Debt Positions (CDP) to generate DAI, a stablecoin soft-pegged to the US dollar.

MKR plays a crucial role in the platform’s ecosystem and supply mechanics, acting as a utility token, governance token, and a recapitalization resource.

MKR is used to pay various fees associated with generating DAI, and its supply is correlated with the demand for DAI.

2. MAKER Overview

Mission and Vision:  long-term objectives.

Maker's main product is the DAI stablecoin, which is soft pegged to the US dollar, meaning that it can be moved to any other fiat currency should the US economy nosedive. DAI is designed for payments, savings, and collaterals and maintains a very stable price. The Maker platform has two different official coins – the Makercoin (MKR) and the Dai Stablecoin (DAI). 

The MAKERCOIN is used to govern the platform, while DAI is designed for payments, savings, and collaterals and maintains a very stable price.

Problem Statement: Challenges or gaps MAKER TOKEN aims to address.

The project aims to back and stabilize a collateral-backed cryptocurrency known as DAI Stablecoin. DAI maintains its purchasing power because its value is stabilized against the US dollar, enabling crypto users to trade or hold assets without worrying about market volatility or that their assets will lose value.

Solution: How the MAKER TOKEN proposes to solve these problems.

Maker addresses one of the biggest issues in the cryptocurrency market – its volatility.

By stabilizing DAI’s value against the US dollar, it enables crypto users to trade or hold assets without worrying about market volatility.

3. Technology and Product

Technical Architecture: Overview of the blockchain and other technologies used.

MAKER's unique smart contract system called Collateralized Debt Positions (CDP) enables users to generate DAI by depositing collateral assets, which are then held by CDPs. The value of collateral assets is always higher than the value of DAI generated, ensuring the stability of the system. 

Product Offering: Description of the product or service, including its development stage.

Maker utilizes smart contracts called Collateralized Debt Positions (CDP) to generate DAI. CDPs allow users to leverage their Ethereum assets to generate DAI, which can then be used for payments, savings, or collateral.

MKR is used to govern the platform and is not a stablecoin, making it more volatile than DAI.

Innovation: How MAKER TOKEN innovates or improves upon existing solutions.

Maker Token brings novelty and enhancement to existing solutions in various ways:

It introduces a decentralized governance system for a stablecoin, empowering MKR holders to vote on Maker Protocol modifications, such as incorporating new cryptocurrencies as collateral assets or adjusting risk parameters. This decentralized governance system fosters transparency, stability, and community engagement in decision-making processes.

Maker Token facilitates the creation of novel digital assets and the transfer of existing financial products along the financial market value chain through tokenization. This capability enables the formation of innovative financing models based on verifiable outputs and increased investments in the impact economy by both public and private sectors.

Maker Token's tokenization solutions are readily available for use, without the need for extensive system overhauls, strategies, or relationships. This makes it simpler for established firms to adapt their infrastructure and accelerate adoption. This approach can result in broader access to alternative investments for individuals, thereby promoting financial and social inclusion.

Roadmap: Development milestones, past achievements, and future goals.

The Maker platform's target market includes the financial market, gambling market, transparent accounting systems, and international trade. The platform's competitive landscape includes other stablecoins on the market, such as Tether, but Maker addresses one of the biggest issues in the cryptocurrency market – its volatility. By stabilizing DAI’s value against the US dollar, it enables crypto users to trade or hold assets without worrying about market volatility or that their assets will lose value.

4. Market Analysis of TOKEN 

Target Market: Size, demographics, and behavior of the potential market.

The potential market for Maker Coin, or MKR, encompasses a diverse range of participants within the cryptocurrency and decentralized finance (DeFi) sectors. Market size is influenced by the adoption of DeFi platforms, growth of the cryptocurrency market, and interest in stablecoins like Dai.

Demographically, the market includes individuals, institutional investors, and entities seeking exposure to decentralized governance and stablecoin ecosystems. Behaviorally, the market is characterized by speculative trading, long-term investment strategies, and governance participation. Users are typically interested in decentralized governance, stablecoin stability, and financial inclusion through DeFi platforms. Market behavior is influenced by price volatility, technological advancements, regulatory developments, and macroeconomic trends in the cryptocurrency market.

Competitive Landscape:

Analysis of competitors and MAKER TOKEN'S position in the market.

Maker Coin is a significant player in the DeFi and stablecoin space, competing with other projects while offering a decentralized governance model that incentivizes good governance. Its price is expected to increase significantly in the coming years, making it an attractive investment for those willing to accept the risks associated with cryptocurrencies.

Market Trends: Current and anticipated trends that could affect MAKER TOKEN.

Maker Token, or MKR, serves as the governance token for the MakerDAO and Maker Protocol, both based on the Ethereum blockchain. Maker Token is transforming from a standalone project token to an ecosystem token, offering staking and liquidity mining options to strengthen governance involvement and broaden the Maker ecosystem. This transition is anticipated to boost revenue streams and the burning of MKR tokens.

MakerDAO is constructing a DeFi ecosystem centered around stablecoins, forming partnerships with leading DeFi protocols such as Aave and Compound. This strategic direction aims to expand the reach and adoption of stablecoins, cultivating a thriving DeFi environment and channeling stablecoin value back into the Maker ecosystem.

Initiatives are underway to diversify revenue sources, streamline organizational structures, and enhance revenue while cutting costs for the Maker protocol, ensuring its long-term prosperity and expansion.

Price predictions for Maker Token point to a positive growth trend, with forecasts predicting substantial price increases in the near future. These projections stem from fundamental analysis, technical indicators, and historical pricing data, reflecting a bullish outlook for Maker Token.

5. Team and Advisors

Backgrounds: Experience and expertise of MAKER TOKEN’s founding team and key members.

Maker Protocol was designed by a disparate group of developers and is governed by the Maker DAO.

MAKER TOKEN Advisory Board: Influence and contribution of the advisors.

Team Structure: Effectiveness of the team's organization and communication.

The Maker platform's team structure includes a group of developers and entrepreneurs who are responsible for the platform's development and maintenance.

6. Maker token, Tokenomics and Financials

Maker token Utility: The purpose and use cases for MAKER TOKEN.

The Maker Protocol stands as one of Ethereum blockchain's prominent decentralized applications (dapps). Crafted by a diverse array of contributors, including developers within the Maker Foundation, external partners, and various individuals and entities, it represents a pioneering decentralized finance (DeFi) application that has garnered significant adoption.

Operated by individuals worldwide holding its governance token, MKR, the Maker Protocol employs a method of scientific governance, incorporating Executive Voting and Governance Polling. Through these mechanisms, MKR holders oversee the Protocol and manage the financial risks associated with Dai, ensuring its stability, transparency, and operational efficiency. Each MKR token locked within a voting contract carries the weight of one vote in decision-making processes.

Maker token Distribution: Allocation of tokens (e.g., team, advisors, public sale).

The Maker platform's team structure includes a group of developers and entrepreneurs who are responsible for the platform's development and maintenance.

The Maker token's advisory board includes experts in blockchain technology, finance, and economics.

Financial Model: Revenue streams, cost structure, and profitability projections.

The Maker token's financial model is based on the platform's unique dual system, where MKR is used to pay various fees associated with generating DAI, and its supply is correlated with the demand for DAI.

Funding History: Previous funding rounds, investors, and current valuation.

The platform's funding history includes investments from venture capital firms and individual investors.

7. MAKER TOKEN’s Community and Ecosystem

Community Engagement: Size, growth, and engagement levels of the community.

The Maker community is a group of MKR token holders who govern the Maker Protocol, the smart contracts that power DAI.

Partnerships: Strategic alliances and partnerships.

The Maker platform's partnerships include collaborations with other blockchain projects, such as Ethereum, and various businesses and organizations that have integrated Dai into their systems.

Network Effects: The project's strategy for achieving and benefiting from network effects.

Maker's Network Effects Strategy

Maker, the decentralized finance (DeFi) protocol that issues the DAI stablecoin, has strategically leveraged network effects to drive adoption and growth. By incentivizing Maker token holders to contribute to the success of the platform, the protocol has been able to accelerate network effects and create a virtuous cycle of increasing value for users.

Issuing Utility Tokens

One key aspect of Maker's network effects strategy is issuing utility tokens (Maker) that are used to govern the protocol and incentivize participation. Maker token holders have a vested interest in the platform's success.

Encouraging Active Participation

Maker also encourages Maker token holders to actively contribute to the protocol's development, risk management, and growth initiatives. This creates a dense network of engaged stakeholders.

Designing for Increasing Value

The protocol is designed to become more valuable as more users join and participate. The larger the network of Maker token holders and DAI users, the more robust and useful the system becomes.

Building an Open Platform

Maker focuses on building a decentralized, open platform that can integrate with other DeFi protocols. This allows Maker to benefit from network effects across the broader DeFi ecosystem.

Driving Strong Network Effects

By aligning incentives with token holders and fostering an engaged community, Maker has been able to drive strong network effects that have contributed to its emergence as a leading DeFi protocol. The network effects have helped Maker achieve rapid growth and adoption in the early stages of the DeFi space.

Sources: 

https://www.sciencedirect.com/science/article/pii/S0929119920302972

https://www.nfx.com/post/network-effects-manual

https://a16zcrypto.com/posts/article/go-to-market-in-web3/

8. Risks and Challenges

Market Risks: 

Exposure to market volatility and competitive threats.

MKR’s value can be volatile compared to the DAI stablecoin, presenting risks for traders. 

Fluctuations can impact the stability of the Maker DAO system.

Technical Risks: Potential technical hurdles in development or deployment.

As with any DeFi platform, smart contracts are susceptible to bugs and vulnerabilities, potentially risking user funds and system stability.

SOURCES: 

The Maker (MKR) Governance Token: How It Works and How to Get It (crypto.com)

9. MAKER TOKENS’s SWOT Analysis.

Strengths:

• Addresses the volatility issue in the cryptocurrency market

• Stabilizes DAI’s value against the US dollar

• Utilizes smart contracts for collateralization and recapitalization

Weaknesses:

• MKR’s value can be volatile compared to the DAI stablecoin

• Susceptible to smart contract vulnerabilities

Opportunities:

• Addresses a significant issue in the cryptocurrency market

• Can become the go-to stablecoin for blockchain-based banking systems.

Threats:

• Competition from other stablecoins.

• Market dynamics and regulatory challenges.

10. How MAKER TOKEN works with TheStandard.io 

MAKER COIN acts as collateral within TheStandard.io protocol, enabling users to obtain loans in EUROs and, soon, USDs without incurring any interest. Furthermore, this process is fully non-custodial.

11. Conclusion and viability score:

Final assessment and Score.

The Maker platform's viability score is high, given the growing demand for stablecoins and the platform's unique dual system, which enables the Maker Dai Stablecoin to be protected from immense market volatility and huge price fluctuations.

6 of the best crypto wallets out there

Vulputate adipiscing in lacus dignissim aliquet sit viverra sed etiam risus nascetur libero ornare non scelerisque est eu faucibus est pretium commodo quisque facilisi dolor enim egestas vel gravida condimentum congue ultricies venenatis aliquet sit.

  • Id at nisl nisl in massa ornare tempus purus pretium ullamcorper cursus
  • Arcu ac eu lacus ut porttitor egesta pulvinar litum suspendisse turpis commodo
  • Dignissim hendrerit sit sollicitudin nam iaculis quis ac malesuada pretium in
  • Sed elementum at at ultricies pellentesque scelerisque elit non eleifend

How to choose the right wallet for your cryptos?

Aliquet sit viverra sed etiam risus nascetur libero ornare non scelerisque est eu faucibus est pretium commodo quisque facilisi dolor enim egestas vel gravida condimentum congue ultricies venenatis aliquet sit quisque quis nibh consequat.

Sed elementum at at ultricies pellentesque scelerisque elit non eleifend

How to ensure the wallet you’re choosing is actually secure?

Integer in id netus magnis facilisis pretium aliquet posuere ipsum arcu viverra et id congue risus ullamcorper eu morbi proin tincidunt blandit tellus in interdum mauris vel ipsum et purus urna gravida bibendum dis senectus eu facilisis pellentesque.

What is the difference from an online wallet vs. a cold wallet?

Integer in id netus magnis facilisis pretium aliquet posuere ipsum arcu viverra et id congue risus ullamcorper eu morbi proin tincidunt blandit tellus in interdum mauris vel ipsum et purus urna gravida bibendum dis senectus eu facilisis pellentesque diam et magna parturient sed. Ultricies blandit a urna eu volutpat morbi lacus.

  1. At at tincidunt eget sagittis cursus vel dictum amet tortor id elementum
  2. Mauris aliquet faucibus iaculis dui vitae ullamco
  3. Gravida mi dolor volutpat et vitae lacus habitasse fames at tempus
  4. Tellus turpis ut neque amet arcu nunc interdum pretium eu fermentum
“Sed eu suscipit varius vestibulum consectetur ullamcorper tincidunt sagittis bibendum id at ut ornare”
Please share with us what is your favorite wallet using #DeFiShow

Tellus a ultrices feugiat morbi massa et ut id viverra egestas sed varius scelerisque risus nunc vitae diam consequat aliquam neque. Odio duis eget faucibus posuere egestas suspendisse id ut  tristique cras ullamcorper nulla iaculis condimentum vitae in facilisis id augue sit ipsum faucibus ut eros cras turpis a risus consectetur amet et mi erat sodales non leo.

Subscribe to our newsletter.

Get the latest alpha from us, and the Chainlink build program in an easy-to-read digest with only the best info for the insider.

It's an easy one-click unsub, but I bet you won't; the info is just too good.

Thanks for subscribing to our newsletter
Oops! Something went wrong while submitting the form.