15 Reasons Why You Should Invest in Maker (MKR) Today
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 take your time to do due diligence to understand what the coin you choose to invest in entails. Get to know what makes a particular project bullish. With that knowledge, you can then decide the amount you wish to stake in the same.
In line with that, should you invest in Maker MKR? To answer this question, you need first to know what and understand what Maker or MKR entails. Maker (MKR) formerly referred to as MakerDao is a lending protocol based on the Ethereum blockchain network. It is a popular protocol in the Decentralized Finance (DeFi) industry with users utilizing the protocol to secure their assets.
The Maker protocol features two main tokens. These tokens are DAI stablecoin and MKR governance tokens. DAI is fully decentralized and is used on the protocol to fund and facilitate loans while MKR is used by the community to run and govern the protocol.
Dai is pegged on the value of the US dollar and retains that value consistently. Both community members and MKR holders can propose changes to the protocol making it one of the fairest and trustless protocols around.
There is a lot you ought to know about MKR, so it would be good if you were to check out its whitepaper. Since you need to know why it is a worthwhile investment, this article will mostly dwell on that. Here are 15 reasons why you should invest in Maker today.
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Reasons Why You Should Invest in Maker (MKR)
There are all kinds of reasons why you might want to invest in Maker — probably some you’ve never considered. Here are 15 that we found. And If you are a long-term investor, Maker could be a very good investment for you.
1. Maker Is Highly Decentralized
Decentralization is a vital component of all cryptocurrencies. It is the most important aspect of the digital currency world. It allows all participants equal freedom and opportunity to influence decisions in a particular blockchain. This freedom essentially means that no one person can control one currency as is the case with conventional centralized financial systems.
Decentralization enhances the level of trust in the network since there is no one controlling authority as is in the case with centralized entities. Every participant in such a network has an exact copy of the available data and thus can monitor any other member of that network.
MKR developers and governors have for so long insisted on keeping the protocol decentralized. This aspect alone is drawing a lot of interest from the DeFi community and the cryptocurrency world in general. Market data from sources such as DeFi pulse show that users are locking more assets on this protocol than in others in this market.
2. Maker Is A Secure Protocol
Security is important in any kind of investment and that includes cryptocurrency investment. If you want to invest in MKR, then security should be one factor that you consider. There are a lot of hackers and fraudsters online searching for loopholes to sabotage digital currency projects.
It is vital, therefore, that every project takes security seriously to protect its investors and users. Security is also paramount in terms of a project’s stability. The more stable a digital coin the better.
MKR is one of the most secure protocols in the DeFi market. The protocol has invested in various online security measures like two-factor verification to keep would-be hackers at bay. MKR has had its fair share of struggles, but its developers have done all they can to ensure that the network remains secure.
It has had no issues for more than six months now. This stability has seen MKR users’ confidence increase and as a result its value. You should put this aspect into consideration when investing in MKR.
Check Out: How to Invest in Maker
3. Maker Is A Transparent Protocol
Transparency is a key factor in the cryptocurrency industry. It is this one aspect that is drawing investors to this industry since they can control and manage their investments directly without the need of a third party or a centralized financial agency such as a bank. With cryptocurrency, there are no regulations from central authorities that significantly influence the growth of your investments.
MKR is one of those protocols that seek to bring total transparency to the DeFi industry. Most of the available stable coins like Tether USD lack transparency and require users to trust in their reserves. As an investor, you are left at the mercy of third-party auditors. This situation is similar to putting your trust in centralized agencies.
MKR aims to change this by getting rid of centralized institutions. You can trace the MKR network on its blockchain, and you do not need any third-party reports. The company also makes public every report and recordings of the protocol’s staff meetings for all participants to view.
The project records this data on the SoundCloud page. Transparency is one key factor to consider when investing in any cryptocurrency.
4. Maker Operates In A Fast-Growing Crypto Niche
Decentralized Finance or simply DeFi is a niche in the digital currency market that is growing at an exponential rate. This market incorporates decentralized services and products, decentralized exchanges, lending platforms such as Maker, payment solutions, derivatives, and assets among other products.
There is a huge potential for making profits considering how revolutionary this industry is becoming. According to Coindesk, DeFi market capitalization is already past the $100 billion mark and growing.
Maker or MKR is one of the biggest contributors to the DeFi industry, contributing almost half of this market at more than $400 million in investment. More than 2.14% of all Ethereum supply is locked up in MKR.
In addition to its DAI stable coin, which pegs its value to the dollar, it also has a transparent lending protocol that has seen tremendous growth thanks to its decentralized features. This growth is one of the strong reasons to invest in Maker MKR today, but you should make sure you check its current performance before deciding to invest.
There is a potential for further growth as more and more people continue appreciating the advantages inherent in DeFi as compared to centralized financial institutions.
5. Maker Allows For Lending On Interest
Maker is a lending protocol where DAI holders lend to others and earn interest on their lending. There is also the aspect of savings rate where you could earn interest by just holding DAI in the platform.
You can also convert your DAI into other assets and cash in on their growth. Such possibilities, together with the fact that the protocol is completely decentralized are drawing a lot of crypto enthusiasts into this project.
As more and more members join this network with the hope of earning a passive income, the value of MKR is bound to go up significantly. Currently, the market value for one MKR token stands at just above $3,340.
In January of this year, the same token was retailing at $581. It has since January appreciated by 475% and has the potential to hit the $5,000 mark. If the Maker community persists in the current trend, then this token is bound to rise in value even higher making it a viable investment option.
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. One, they have a deflationary system that helps maintain the value of their token over time. In this system, a part of the interest generated through lending and borrowing is burned every time a CDP smart contract closes.
This procedure allows the system to maintain the supply and demand of the asset and hence its value. It is different from other similar projects since they are prone to inflation as a result of their reward issuance policies.
There is also no mining of coins in the Maker project. MKR is generated or burned only through DAI price fluctuations. The developers have created a unique system that utilizes market mechanisms and incentives to ensure that DAI remains pegged to the value of USD.
One DAI in that case remains daggling between $0.98 and about $1.03 based on market dynamics. Maintaining this value ensures that the price of MKR does not get affected severely by sudden changes in the market making it a worthwhile investment.
7. Maker Is Available On Multiple Exchanges
It might not seem like a viable reason to consider when investing in a cryptocurrency, but the number of exchanges in which a token is listed is a factor that you should take into serious consideration.
Exchanges are the platforms on which cryptocurrencies are bought and sold. The more major exchanges a digital coin is listed, the more it affects its value. These platforms also serve as marketing agencies since they help expose viable projects like Maker.
Among the major exchanges on which MKR is listed include major decentralized as well as centralized platforms. These exchanges include platforms such as Binance, ShapeShift, HitBTC, and OKEX among others.
Being listed on these exchanges makes a token a viable investment option since you can easily change it to a different asset or liquidate it to fiat currency.
It also makes the process of buying and selling the token very easy since you can get a variety of willing buyers or sellers on the major exchange platforms.
8. Maker Has High Trading Volume
People buy and sell cryptocurrencies every day. There are those high-selling digital coins that have very high trading volumes. Such coins are ideal for day traders since you can quickly cash in on their volatility brought about by high demand. The higher the trading volume value, the more viable a coin is for investing.
MKR trading volume is not as high as major cryptocurrencies such as Bitcoin and Ethereum but is also relatively high to make it a good option to include in your portfolio. Looking at its performance in the last 24 hours, MKR recorded an impressive trading volume of $33,509,997.
This value indicates that despite its relatively high price per token, it is still highly liquid and a good investment option. The liquidity of a coin is a measure of high quickly you can convert your assets into fiat currency or other crypto assets.
9. Maker Has A High Market Capitalization
The market capitalization of any asset is the total number of tokens in supply or the tradable stocks in the case of a traditional company multiplied by the current market value of that particular asset.
This value indicates the stability or otherwise of that asset or token. It is a good indicator of the performance of the asset and a viable way of determining if to invest in MKR or not. A high market cap indicates the stability of an asset in the market. It means that the asset will be severely affected in case of sudden market shocks. The high market cap cushions the price of that particular token.
MKR has a market cap of just over $2.8 billion. The token has a circulating supply of 991,328 tokens, and each token retails at $3,013. Even with the high volatility that characterizes the digital coins market, the MKR market cap would be in a position to cushion it against sudden market changes, making it a worthwhile investment.
If you have a few of these tokens in your portfolio, you stand to gain a passive income in interest payments, and also have a cushion in case the token price gets hit by negative market changes.
10. Maker Has A Limited Supply
Since the advent of cryptocurrency, there have been a lot of these coins have come into existence. Each of these currencies has different mechanisms of people owning the coins. The two most popular mechanisms are buying coins from other people and mining.
Bitcoin, the most popular cryptocurrency introduced the mining mechanism with altcoins following suit. Bitcoin, however, puts a cap on the number of coins that can ever be mined. This limitation is one of the reasons why bitcoin’s value has soared.
MKR is different from most other tokens. Like Bitcoin, it also has a limited number of coins that can ever be in supply, though you can only own MKR through buying from other holders. You can never mine this coin.
The fact that it cannot be mined, coupled with its limited supply is making the coin’s value soar as more and more people appreciate its role in the DeFi industry. The current circulating supply is 991,328, while the maximum supply is 1,000,000.
With the limited maximum supply, and the demand this token continues to have, it makes sense to have at least a few of these tokens in your cryptocurrency portfolio.
11. Maker Can Be Stored In Multiple High-Quality Wallets
If you are a long-time trader, then it is paramount that you know how to store your digital coins as you wait for them to increase in price. Keeping them on the exchange platforms is extremely risky as online fraudsters can easily steal your keys.
The best place to have them secure is in a hardware wallet storage. These kinds of wallets keep your keys offline and away from the reach of hackers. Luckily, MKR and DAI are compatible with a lot of such wallets.
MKR is compatible with any wallet that is ERC-20 compatible. It means that you can then buy these tokens to hold them for a while before selling them at a profit if the price goes up. The best option, in this case, is getting a Ledger Nano S or its better version the Ledger Nano X
12. Maker Has Serious Developers Behind It
Before investing in any crypto project, you must determine if it is a serious one or just another online gimmick. After Bitcoin, there have been a lot of digital coins most of which are useless, and whose developers are unknown. Bitcoin developers are also anonymous but have proven to be a stable project considering its reception and use in the cryptocurrency industry.
Maker is different from a lot of other altcoins. It not only has a practical use, but also a serious team of developers who are determined to continue maintaining and improving the protocol. The idea began with Rune Christensen in 2014 when he created the MakerDAO. It was later launched on the Ethereum network in 2017 after the formation of the Maker Foundation.
This foundation is the basis of the entire project as it aims to keep the project growing and keep it decentralized. Other notable individuals behind the project include President Steven Becker and Shefali Roy who is an economist. A project with such serious individuals is one that you can consider putting some money in.
13. Maker Price Predictions Show Promising Growth
With the prevailing conditions, crypto analysts are projecting that MKR is likely to soar higher in the next two years. A few analysts have made a good effort to predict its growth path towards 2025. According to CryptoNewz.com, the price of a token of MKR is likely to surpass the $10,000 mark by the year 2025.
Going by this prediction, it means that you will have gained about $7,000 per token if you were to invest in MKR at the moment. With about 10 tokens that would cost you now approximately $33,000, you would have more than $100,000 in just about three years.
While this is not a certainty considering the volatile nature of the crypto market, it is also a possibility to look at how bitcoin changed in price in just a few years. You could take a risk and have a token or two of MKR and monitor its progress.
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14. Maker Price Is Correlated To Bitcoin
Bitcoin and Ethereum are the two dominant cryptocurrency projects at the moment. Bitcoin dominates the market as the pioneer in this industry while Ethereum brought a whole new idea of smart contracts to the cryptocurrency industry.
Most other digital currencies tend to follow the trends of these two dominant players in the market. With MKR protocol being built on the Ethereum blockchain, you’d expect its price to mirror that of ether in terms of performance.
Ethereum has been performing considerably well in the past few months and seems to have a promising future. Hopefully, MKR will follow a similar path making it a viable investment option.
15. Maker Has Practical Use Cases
There are so many cryptocurrencies in the crypto space. Currently, there are more than four thousand digital coins with different use cases. A majority of these coins are just pumping and dump projects with no clear use cases.
Most of them are imitations of others just trying to raise money from unsuspecting individuals then fizzle out. Only a few of the many cryptocurrencies have presented real and practical use cases.
Maker is one of the projects that have proved useful especially in the finance sector. Together with a few others, they have initiated a whole new industry known as decentralized finance or DeFi.
Maker provides a decentralized platform from which users or participants can take low-interest loans with cryptocurrency as their collateral. The protocol utilizes DAI, which is pegged to $1. The entire system is pegged on the Ethereum blockchain, is completely decentralized, and is open-source.
It seeks to solve the hurdles that people go through when taking loans from centralized financial institutions. Anyone with ether tokens can easily take a loan on this platform. Borrowers usually pay back their loans with interest giving value to the MKR tokens. It is this practical use that makes MKR a viable token to have as part of your investment portfolio.
So, why should you invest in Maker MKR today? This article gives you probable reasons why you should consider investing in MKR, but it is not a sure bet that you will make profits.
All investments are risky undertakings, and more so any crypto investments. It is always wise to invest using money that you would be willing to lose and to spread your risk over various assets. You remain with the ultimate decision in the long run.
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