Maker targets the problems that lie with the stablecoins currently available in the market. The cryptocurrency market is notoriously known for its volatility and while the volatility is what accounts for the large userbase of the technology, it is also something that scares many investors away. Stablecoins that coins that have their value pegged – either to a fiat currency or a commodity like gold. They provide the stability required to transact in cryptocurrencies. And one of the most common denomination of cryptocurrencies occur in the stablecoin Tether, USDT, which is pegged to $1.

However, Tether – the most popular stablecoin in the market – has faced a lot of problems. It has been under a lot of controversies regarding the reliability of its value. The stablecoin is backed by the firm holding assets in dollars equivalent to the Tether in circulation – which was found to not be accurate. This has led the exploration of the blockchain technology for stablecoins as well.

What is Maker?

Maker is the governance token of MakerDAO. The decentralized autonomous organization responsible for the stablecoin DAI. The MKR token is responsible to stabilize the value of DAI and ensure that it stays pegged at $1. Maker is created and destroyed for that purpose. MakerDAO utilizes the blockchain technology and complex algorithms to maintain DAI’s value. This eliminates the common problems that fiat-backed stablecoins face.

DAI is issued through a kind of insurance that is backed by smarts contracts known as collaterized debt position (CDP). CDPs are brought through ETH and, in return, issues DAI stablecoin. Fees are charged in MKR and once the loan is repaid the issued DAI is destroyed. Maker coins act as a safenet system in case the market for Ethereum falls. If the collateral that is held in ETH does not cover the issued DAI anymore, MKR is sold for additional collateral.

Is MKR a good investment?

Maker coin started off the year with a price level of $576. The bull run of 2021 helped the cryptocurrency reach to new heights. The bullish momentum resulted in Maker establishing a new all-time high at $6,339. The price ultimately fell drastically as the market fell into the crutches of the bears. However, in the recent timeframes, the cryptocurrency market appears to be recovering. Maker stands at a price level of $3,997 and the uptrend appears to be going strong.

The strong technical coupled with the fundamentals suggest MKR coin has a good future potential. Wallet Investor predicts the cryptocurrency will stand at a price level of $7,173 in a year’s time. MKR is expected to reach towards a staggering price of $20,151 in five years’ time. Digital Coin Price suggests the year ending price of the cryptocurrency will be at $5,736. The price in 2026 is expected to be at $13,802.