Digital currencies are growing in popularity. DAI is one of the newest cryptocurrencies on the market. It’s built to be stable, so it can act as a decentralized, digital equivalent to cash. MakerDao’s DAI coin is designed to fill that void and work alongside the global economy, instead of against it.
In this post, we have listed fifteen reasons why MakerDao’s DAI cryptocurrency coin is worth your time and money.
There are lots of reasons why you might want to buy Maker. Many think that they have to be a savvy investor with lots of capital — but, with some common sense and research, it’s pretty accessible, even for beginners.
When it comes to investing in cryptocurrency, popularity, and marketing should be the last reasons that drive you to invest. You should do your due diligence to understand what the coin you choose to invest in entails. Find out what makes a project bullish then decide how much you need to stake in it.
As a result, should you invest in Maker MKR? To answer this question, you should first understand what Maker and MKR entail. Formerly known as MakerDao, Maker (MKR) is a lending protocol built on the Ethereum blockchain and caters to the Decentralized Finance (DeFi) industry. The protocol secures assets for its users.
The Maker protocol features two main tokens. These tokens are DAI stablecoin and MKR governance tokens.On the protocol, DAI is used to fund and facilitate loans, while MKR is used by the community to manage and administer the protocol.
MKR holders and community members may both propose changes to the Dai protocol, making it one of the most fair, trustworthy protocols available. Dai is pegged to the US dollar and maintains that value consistently.
This article will mostly focus on why Maker is a worthwhile investment, so you might want to read the MKR whitepaper. Here are 15 reasons why you should consider Maker.
Reasons Why You Should Invest in Maker (MKR)
The following are 15 reasons why you might want to invest in Maker – probably some you haven’t thought of. And if you are a long-term investor, Maker could be a very good investment.
1. Maker Is Highly Decentralized
Decentralization is the most important aspect of digital currencies. It allows all participants an equal chance to influence the decisions made within a particular blockchain. Due to this freedom, one person cannot control one currency as it is the case in conventional financial systems.
As a result of decentralization, the level of trust in the network increases because no single entity is in charge as there is with centralized entities. Every member of the network has a copy of the available data, which means that they can monitor each other.
As long as the MKR protocol remains decentralized, its developers and governors have drawn a great deal of interest from the DeFi community and the cryptocurrency world in general. This protocol is being used to lock more assets than others in this market, according to data from sources like DeFi pulse.
As a result of its focus on decentralization and all of its features, MKR has surpassed Compound, Uniswap, and WBTC.
2. Maker Is A Secure Protocol
Security is important in any kind of investment and that includes cryptocurrency investment. If you are considering investing in MKR, you should consider security. There are many hackers and fraudsters searching online for ways to sabotage digital currency projects.
The more user and investor protection there is in a project, the more likely it is to be stable. Therefore, every project needs to take security seriously in order to protect users and investors.
As one of the most secure protocols on the DeFi market, MKR invests in various online security measures, such as two-factor authentication. Despite its struggles, MKR’s developers have done everything in their power to make sure that the network remains safe.
As a result of this stability, MKR users’ confidence has grown, increasing the value of MKR. You should consider this when investing in MKR.
3. Maker Is A Transparent Protocol
Transparency is a key factor in the cryptocurrency industry. One of the reasons investors are drawn to this industry is the fact that they can manage their investments directly without depending on a third party or financial institution. Since cryptocurrency isn’t regulated by central authorities, it doesn’t influence the growth of your investments significantly.
Most of the existing stable coins, like Tether USD, lack transparency, and the users have to trust in their reserves. MKR aims to bring complete transparency to the DeFi industry.Putting your trust in centralized organizations is similar to putting your trust in third-party auditors.
Through MKR, centralized institutions are eliminated. You can trace the MKR network on its blockchain, and there are no third-party reports required. Transparency is a key factor in investing in any cryptocurrency, which is why every report and recording of the protocol’s staff meetings is made public on the company’s SoundCloud page. Every investor should take this into consideration before investing in any cryptocurrency.
4. Maker Operates In A Fast-Growing Crypto Niche
There is a growing niche in the cryptocurrency market called Decentralized Finance (DeFi). The market includes decentralized products and services, decentralized exchanges, lending platforms like Maker, payment solutions, derivatives, and assets, among others.
The potential for profits is huge, considering how revolutionary the industry is becoming. According to Coindesk, the DeFi market capitalization has already exceeded $100 billion.
Maker, or MKR, contributes almost half of the DeFi industry, with investment of over $19.88B, or more than 2.14% of the Ethereum supply.
Besides its stable coin, which is pegged to the dollar, it has a decentralized transparent lending protocol that has seen tremendous growth in recent years. Making sure that you check Maker MKR’s current performance before investing is one of the strongest reasons to buy today.
There is potential for further growth as people continue to appreciate the advantages of DeFi instead of centralized financial institutions.
5. Maker Allows For Lending On Interest
It has a lending protocol where DAI holders lend to others and earn interest on their lending. It also has a savings rate where you can earn interest by simply holding DAI.
DAIs can also be converted into other assets and invested in their growth. These possibilities, as well as the fact that DAI is a completely decentralized protocol, have attracted many crypto enthusiasts to the project.
As more and more people join this network to earn passive income, the value of MKR is bound to increase substantially. At the moment, one MKR token is valued at $3,225. The same token retailed for $581 in January of this year. It has appreciated by 475% since then and is expected to reach $5,000 soon. Maker is bound to increase in value even higher if the current trend continues, making it a good investment choice.
6. Maker Has Stability In Terms Of Demand And Supply
The Maker protocol employs a unique strategy to keep the supply and demand of their tokens balanced. Firstly, they have a deflationary system that helps maintain the value of their token over time. Every time a CDP smart contract closes, a part of the interest generated from lending and borrowing is burned.
In this way, the system can maintain supply and demand of the asset and thus its value. Other similar projects are prone to inflation due to the way their reward-issuing policies are implemented.
There is also no mining of coins in the Maker project. The developers have developed a system that utilizes market mechanisms and incentives to ensure that DAI remains pegged to USD in order to generate and burn MKR.
In such a case, one DAI fluctuates between $0.98 and approximately $1.03 depending on market conditions. Maintaining such a value ensures the MKR price does not suffer from dramatic changes in the market, thus making it a valuable investment.
7. Maker Is Available On Multiple Exchanges
The number of exchanges on which a cryptocurrency is listed might not seem like a compelling reason to consider when investing, however.
Exchanges are the platforms on which cryptocurrencies are bought and sold. As a digital coin is listed on more exchanges, the more it affects its value. Exchanges also serve as marketing agencies for projects like Maker, which they help expose.
Among the major exchanges where MKR is listed are the following: Binance, ShapeShift, HitBTC, OKEX, among others.
Listing on these exchanges makes tokens an attractive investment option since you can quickly transform them into other assets or convert them into fiat currency.
On the major exchange platforms, you can also find a variety of buyers and sellers willing to purchase or sell the token.
8. Maker Has High Trading Volume
Cryptocurrencies are traded every day. Some have very high trading volumes. There are those digital coins that are very popular. It is easy to cash in on the volatility of such coins because of their high demand. The higher the trading volume, the more viable the coin is as an investment.
The trading volume of MKR is not as high as those of Bitcoin and Ethereum, but it is still relatively high, making it a good option for your portfolio. According to MKR’s 24 hour trading volume, it reached $249,192,084. This value demonstrates that despite its high token price, MKR remains highly liquid and a good investment option. Liquidity is a measure of how quickly a coin can be converted into fiat or other crypto assets.
9. Maker DAO’s High Market Capitalization Is As Good As Gold!
A company’s market capitalization is determined by multiplying its current market value by the number of tokens available for purchase, or a company’s tradable stocks if it’s a traditional company.
This value indicates the stability or otherwise of that asset or token. This is a good indicator of the performance of an asset and a good way to decide if one should invest in MKR or not. An asset with a high market cap indicates that the asset can withstand sudden market shocks. A high market cap cushions the price of this particular token. MKR’s market cap exceeds $3.1 billion. There are 991,328.38 tokens in circulation, and each token sells for $3,225. Even with the high volatility of the digital coin market, MKR’s market cap will protect it against sudden changes in the market, making it a worthwhile investment.
In addition to gaining passive income from interest payments, you will also protect your portfolio in case the token price plunges due to negative changes in the market.
10. Maker Has A Limited Supply
As a result of the advent of cryptocurrency, there have been many different kinds of digital coins created. These coins have different mechanisms by which they can be owned by people. Two of the most popular ways to acquire coins are through purchases and mining. Bitcoin, the first cryptocurrency to introduce mining, and altcoins followed soon after. This limitation is one of the reasons why bitcoin’s value has soared. Bitcoin, however, limits the number of coins that can ever be mined.
In addition to having a limited supply like Bitcoin, MKR can also be owned only by buying it from other holders. It cannot be mined.
With the limited supply and continuing demand for these tokens, it makes sense to own a few of them as part of your cryptocurrency portfolio.
Given the limited maximum supply, and the continued demand for the token, it makes sense to own at least a few of these tokens as part of your cryptocurrency portfolio.
11. How to store your DAI and MKR tokens – the best way for long-term traders
You should know how to store your digital coins if you are a long-term trader. Keeping them on the exchange platforms is extremely risky as online fraudsters can easily take your keys.
The best way to keep your keys secure is to use a hardware wallet. These wallets keep your keys offline and out of reach of hackers. Fortunately, MKR and DAI are compatible with quite a few hardware wallets.
MKR is compatible with any wallet that is ERC-20 compatible.
It is important that your wallets keep your keys offline and out of the reach of hackers. DAI and MKR are both compatible with many such wallets. MKR is compatible with any wallet that is ERC20 compliant. The best option, in this case, is to get a Ledger Nano S or its better version, the Ledger Nano X, for holding these tokens, then selling them at a profit if the price goes up.
12. Maker Has Serious Developers Behind It
It is important to determine whether a crypto project has any real potential or is just another gimmick. After Bitcoin, there have been a lot of digital coins, most of which are useless, and whose creators are unknown.
Developers of Bitcoin are also anonymous, but they have proved to be a stable project based on its reception and use within the cryptocurrency community. Maker is different from many other altcoins. Its practical use is backed by a team of developers committed to maintaining and improving the protocol.
The MakerDAO was created by Rune Christensen in 2014. Following its initial launch on Ethereum in 2017, it was later launched on the Maker Foundation, which serves as the basis of the entire project since it seeks to maintain its decentralized nature. Shefali Roy, an economist, and President Steven Becker are also involved in this project. A project with such serious individuals may be worth investing in.
13. Maker Price Forecast for 2025
In the prevailing conditions, crypto analysts expect MKR to soar higher in the next two years. It’s predicted that the price of a token of MKR is likely to surpass the $10,000 mark by 2025. CryptoNewz.com predicts that the price of a token of MKR will surpass the $10,000 mark by 2025.
If you invest in MKR at this time, you will have gained around $7,000 per token. With 10 tokens worth roughly $33,000, you would have more than $100,000 in just about three years.
You could take a risk and buy a token or two of MKR and monitor the price change. However, this is not a certainty given the volatile nature of the crypto market.
14. Maker Price Is Correlated To Bitcoin
Currently, Bitcoin and Ethereum are the two most dominant cryptocurrency projects. Bitcoin is a pioneer in this industry, while Ethereum introduced smart contracts to the industry.
Other digital currencies often follow the trends of these two dominant players in the market. Since MKR protocol is built on the Ethereum blockchain, its performance should mirror ether’s.
In the past few months, Ethereum has shown considerable growth, and seems to have a promising future. Hopefully, MKR will follow a similar path, making it a viable investment.
15. Maker Has Practical Use Cases
In the crypto space, there are more than four thousand cryptocurrencies with various uses. In most cases, these coins are pump and dump projects with no clear use cases. Most of them are imitations of others just trying to raise money from unsuspecting individuals and eventually fail. Among the many cryptocurrencies, few have demonstrated useful applications. Maker, a blockchain project focusing on finance, is one such example. In association with others, Maker has pioneered a whole new business called decentralized finance or DeFi. Maker provides a decentralized platform from which users can borrow low-interest loans backed by cryptocurrency. Protocol uses the DAI token, which is pegged to $1. The entire system is decentralized, open-source, and based on Ethereum’s blockchain.
Using ether tokens, anyone can easily apply for a loan on this platform, eliminating the hurdles people face when taking loans from centralized financial institutions. Usually, borrowers repay their loans with interest, giving MKR tokens value. It is because of this practical use that MKR is a good token to invest in.
Here are some reasons why you may want to consider investing in Maker MKR today. However, it is not an absolute certainty that you will be successful in investing in Maker MKR.
Crypto investments are risky endeavors, and even more so any investments. It is always best to invest with money that you are willing to lose and to spread the risk across various assets. Ultimately, it is your choice.
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Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
