About Maker (MKR)

Overview

Use of the MKR Token in Maker Governance

The MKR token—the governance token of the Maker Protocol—allows those who hold it to vote on changes to the Maker Protocol. Note that anyone, not only MKR holders, can submit proposals for an MKR vote.

Any voter-approved modifications to the governance variables of the Protocol will likely not take effect immediately in the future; rather, they could be delayed by as much as 24 hours if voters choose to activate the Governance Security Module (GSM). The delay would allow MKR holders to protect the system, if necessary, against a malicious governance proposal (e.g., a proposal that alters collateral parameters contrary to established monetary policies or that allows for security mechanisms to be disabled) by triggering a Shutdown.

Polling and Executive Voting

In practice, the Maker Governance process includes proposal polling and Executive Voting. Proposal polling is conducted to establish a rough consensus of community sentiment before any Executive Votes are cast. This helps to ensure that governance decisions are contemplated and reached by consensus before the voting process itself. Executive Voting is held to approve (or not) changes to the state of the system. An example of an Executive Vote could be a vote to ratify Risk Parameters for a newly accepted collateral type.

At a technical level, smart contracts manage each type of vote. A Proposal Contract is a smart contract with one or more valid governance actions programmed into it. It can only be executed once. When executed, it immediately applies its changes to the internal governance variables of the Maker Protocol. After execution, the Proposal Contract cannot be reused.

Any Ethereum Address can deploy valid Proposal Contracts. MKR token holders can then cast approval votes for the proposal that they want to elect as the Active Proposal. The Ethereum address that has the highest number of approval votes is elected as the Active Proposal. The Active Proposal is empowered to gain administrative access to the internal governance variables of the Maker Protocol and then modify them.

The MKR Token’s Role in Recapitalisation

In addition to its role in Maker Governance, the MKR token has a complementary role as the recapitalisation resource of the Maker Protocol. If the system debt exceeds the surplus, the MKR token supply may increase through a Debt Auction to recapitalise the system. This risk inclines MKR holders to align and responsibly govern the Maker ecosystem to avoid excessive risk-taking.

MKR Holder Responsibilities

MKR holders can vote to do the following: 1. Add a new collateral asset type with a unique set of Risk Parameters. 2. Change the Risk Parameters of one or more existing collateral asset types, or add new Risk Parameters to one or more existing collateral asset types. 3. Modify the Dai Savings Rate. 4. Choose the set of Oracle Feeds. 5. Choose the set of Emergency Oracles. 6. Trigger Emergency Shutdown. 7. Upgrade the system.

Wallets

As with DAI, MKR is an ERC20 token and supported by a range of wallets. We recommend Ledger, Trezor, MyEtherWallet or Exodus.

A wallet is essentially a bank account for your cryptocurrency and the wallet address is like your account number. The sender of the cryptocurrency needs a wallet address so they have somewhere they can send it from their wallet, much like a bank transfer. This wallet is giving you access to the blockchain where you can view your balance, send and receive cryptocurrency.

For information please read our beginners guide to cryptocurrency wallets.

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Storing your coins with Wallets

A wallet is essentially a bank account for your cryptocurrency and the wallet address is like your account number. The sender of the cryptocurrency needs a wallet address so they have somewhere they can send it from their wallet, much like a bank transfer. This wallet is giving you access to the blockchain where you can view your balance, send and receive cryptocurrency.

For information please read our beginners guide to cryptocurrency wallets.

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POLI - internet bankingPOLI is secure and fast. It links directly to your internet banking – login with your normal details and the rest is easy. No extra fees or surcharges. Watch this short video to see how it works.

About Bitcoin

Bitcoin (BTC) is a form of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds. Transactions are stored on a distributed, immutable, online, public ledger known as a blockchain. Bitcoin was the first truly decentralised cryptocurrency which was created by a programmer under the pseudonym Satoshi Nakamoto and was released in 2009. The system is peer-to-peer, verified by network nodes and recorded in a public distributed ledger called the blockchain. Bitcoin can be exchanged for other currencies, products, and services with over 100,000 merchants and vendors accepting bitcoin as payment. Bitcoin can also be held as an investment. There are only a fixed number of Bitcoin will ever be mined (21 million), it’s not controlled by any one government or central bank, and there’s no such thing as quantitative easing or fractional reserve banking. These qualities make Bitcoin excellent as a store of value and a long-term safe-haven asset, similar to gold.

A Bitcoin success story that went viral on social media is Kristoffer Koch from Norway. Koch invested around $27 in Bitcoin in 2009 and then forgot about it for four years. He remembered about his Bitcoin wallet in 2013, which had then grown in value to $886,000.

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