MKR

Maker

MKR to USD
Performance
Market capitalisation
Total transaction volume
1D
7D
1M
6M
1Y
All Time
Price
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Market cap
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24h Volume
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All time high price
Total issued tokens
YTD Performance
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YTD Low
Maximum supply
Initially 1,000,000; tokens bought back from income generated and burnt; tokens issued if loan losses cannot be covered by reserves.

Project history

Launched in 2017, MakerDAO is a decentralised finance (DeFi) platform on the Ethereum blockchain, focusing on the creation and management of the Dai stablecoin, a cryptocurrency pegged to the US dollar. MakerDAO operates as a decentralised autonomous organisation (DAO), which means it’s managed by its community through governance tokens, allowing participants to vote on key protocol decisions. 

The main purpose of MakerDAO is to enable the minting of the Dai stablecoin through collateralised debt positions (CDPs), providing a stable means of exchange and store of value in the cryptocurrency market. In addition to stablecoin minting, MakerDAO supports decentralised lending, offering users the ability to borrow Dai against their crypto assets without an intermediary. 

MakerDAO has two tokens, MKR and DAI.

Technology

MakerDAO’s technology centres around the Dai stablecoin, which differentiates itself from traditional stablecoins by being overcollateralised with various crypto assets rather than fiat currency. This is a core element in its decentralised lending system, where users create CDPs by locking up crypto assets to mint Dai. This mechanism facilitates lending without intermediaries, allowing borrowers to retain ownership of their crypto assets while accessing liquidity. 

Additionally, the Dai Savings Rate (DSR) mechanism enables Dai tokenholders to earn interest by locking their Dai into the DSR contract. Interest is generated from the stability fees paid by users generating Dai against their collateral.

Token supply model

MakerDAO is governed by MKR tokens, which play a crucial role in maintaining the system’s stability and making decisions on the protocol’s future development plans. MKR tokenholders can vote on various proposals, ranging from adding new types of collateral to adjusting system parameters like stability fees. 

The MKR supply fluctuates based on the operational and governance needs of the MakerDAO system. New MKR tokens can be created as a last resort to cover system deficits, specifically when the value of collateral in the system does not cover the Dai in circulation.

Key value drivers

MakerDAO facilitates access to liquidity without the need to liquidate crypto assets, a significant advantage for those looking to leverage their holdings without exiting their positions. As DeFi systems grows, MakerDAO’s role in providing a platform for such services could potentially drive interest to its ecosystem. 

MakerDAO’s expansion into new lending products and sectors such as real-world asset integrations could potentially improve incentives for its MKR governance token. However, there are concerns regarding the high concentration among a few major tokenholders, as well as its susceptibility to market dynamics that can affect MKR’s role in the stability mechanism.

This information was prepared by Sygnum Bank AG. This information may contain forward looking statements and may be subject to change. The opinions expressed herein are those of Sygnum Bank AG, its affilitates, and partners at the time of writing. This is for informational purposes only and contains general material. It does not constitute any advice or recommendation, an offer or invitation by or on behalf of Sygnum Bank AG to purchase or sell assets or securities. It is not intended to be used as a general guide to investing, and it should be used for informational purposes only. When making an investment decision, you should either conduct your own research and analysis or seek advice from an expert to make a calculated decision. The information and analysis contained here have been compiled from sources believed to be reliable. However, Sygnum Bank AG makes no representation as to its reliability or completeness and disclaims all liability for losses arising from the use of this information.

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