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Maker (MKR)

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The Decentralized Stablecoin Platform Developed on Top of the Ethereum Blockchain.

Maker (MKR) Fact Sheet

  • Maker (MKR) is a decentralized autonomous organization (DAO) that lives on top of the Ethereum (ETH) blockchain and lets anyone lend or borrow cryptocurrencies without the need to check their credit.
  • Maker is the decentralized network for lending, where MKR is the core utility as well as governance token.
  • The network essentially fuses advanced smart contracts with a pegged stablecoin.
  • Holders of the MKR cryptocurrency are provided with the opportunity to make critical decisions surrounding the system's overall service and its future.
  • The project was originally created in 2014 with the main intention of providing cheap and quick transactions by using the Maker Protocol.

MKR Historical Data Price Chart in the US Dollars (USD)


MKR Historical Data Price Chart in the US Dollars (USD). Source: TradingView

What is Maker (MKR)?

Maker (MKR) is a cryptocurrency that MakerDAO developed. This cryptocurrency has the primary objective of supporting the stability of the Dai (DAI) cryptocurrency, which is MakerDAO's stablecoin and aims to enable governance within the Dai Credit System.


In fact, throughout the MakerDAO ecosystem, there are two primary cryptocurrencies utilized in order to make it work the way it does. First, there’s the Maker (MKR) cryptocurrency, and then there’s Dai (DAI) as a stablecoin.


DAI is, by design, meant to provide an alternative to the more volatile cryptocurrencies and enable users access to a new type of financial system.


However, the MKR token is used to keep the DAI stablecoin as stable as possible.


It is important to distinguish the three parts which make this ecosystem work, and these include:

  • MakerDAO - this is the decentralized autonomous organization (DAO), which is filled by holders of the MKR token, who can guide the development of the Maker Protocol.
  • The Make Protocol is a collection of smart contracts on top of the Ethereum (ETH) blockchain, which maintain the multi and over-collateralized DAI stablecoin.
  • MKR - this is the native cryptocurrency of the ecosystem, and it is used within the Maker Protocol as a means of maintaining DAI's peg to the US dollar, and this occurs through numerous auctions that address the surpluses or even the deficits within the ecosystem, and as such is used by its holders to vote on governance protocol and maintain the protocol.

How is Maker (MKR) Used?

Within systems utilized across traditional stablecoins, they will typically utilize reserves of FIAT currencies, or even gold, to peg a cryptocurrency in order for it to have value to the real-world assets, as they can keep it as stable as possible. However, this has proven to historically cause some issues.


MakerDAO, as a result of this, uses the MKR token to act as an alternative to the price fluctuations that DAI might encounter.


Some stablecoins also gain a lower level of volatility because they are pegged to FIAT currencies, such as USD. However, others can be controlled through blockchain-based mechanisms or even algorithms that can aid them in maintaining the value they need to be at.


However, MKR stands out because it can retain the value of the DAI stablecoin the same as $1. This is done through the creation and the process of destroying MKR in response to the aforementioned price fluctuations of DAI.


DAI can also leverage a collateralization system, where holders can fill the role of being a part of a controlling mechanism aiding in the overall network management.


DAI as a stablecoin is used at the point in time when buyers put a purchase order on a smart contract-based collateralized debt position (CDP), which can behave similarly to a loan.


These CDPs are bought through the usage of the Ethereum (ETH) cryptocurrency, where DAI is provided in return for their ETH. ETH is the collateral to the loan, similar to how a house, for example, would serve the role of being collateral at the point in time when a person takes out a loan.


This system can enable individuals the ability to get a loan against their ETH holdings, and when the loan gets repaid, the DAI is burned or destroyed, where the fees can occur in MKR afterward.

Use-Cases of Maker (MKR)

The MKR cryptocurrency has the use-case of being the solution to an event in which the value of ETH might decrease too quickly for the DAI system to be able to handle it. If the collateral system is not enough to cover the value of DAI, in that case, MKR is created and is then sold to the market as a means of raising additional collateral.


The Maker Platform, which is known as MakerDAO, is the protocol, as well as the governance framework on top of which DAI and MKR are used. This is a DAO on Ethereum. The smart contracts, in this case, are computerized codes that can contain and perform specific instructions which were coded in them at the points in time when the pre-determined conditions are met.


In fact, MKR holders are provided with the opportunity to make a decision surrounding how much DAI holders can earn if they are saving DAI on the platform. The amount of DAI that holders earn for doing this procedure is dubbed the DAI Savings Rate. The DAI Savings Rate has been as high as 8.75% and as low as 0%. What this means is that the market can influence how much they are earning.


MKR holders have historically voted to make the DAI Savings Rate go to 0% due to the fact that through this, they encouraged the future sale of the DAI cryptocurrency, which brought the DAI stablecoin closer to $1. In fact, any time the value of DAI goes above $1, the MKR holders are then expected to vote to decrease the savings rate and to reduce demand, which causes the prices to fall as a result. If it goes under $1, then they can vote to increase the savings rate, which increases the demand to hold the DAI cryptocurrency, and this causes its value to increase.


The more MKR a person holds, the more they will be able to have a say when it comes to which cryptocurrencies can be used in the protocol or which real-world assets can be utilized in order to generate more DAI.


Furthermore, Maker as a network has seen a high level of usage and as such, has established a large ecosystem.


The ecosystem is split across multiple categories, including:

  • Get Dai - this features dApps and Services such as Bitcointrade, Buenbit, Coinbase, and Oasis.app, Panda Exchange, Swissbord, and Wyre.
  • Use Dai - this features dApps and Services such as Foundation, imToken, Museum of Contemporary Digital Art, Set Protocol, ValentePOS, and Wirex.
  • Hold Dai - this includes dApps and Services such as Anchorage, Coinbase Custody, Ledger, MetaMask, MyCrypto, and Trezor.
  • Accept Dai - this includes dApps and Services such as Althea, DENT, OpenSea, PundiX, Red Cross Argentina, and Wiv.
  • Decentralized Finance (DeFi) - this includes dApps and Services such as 1inch, Curve, DeFi Saver, InstaDapp, Oasis Borrow, REN, and Uniswap.
  • Games - this includes GameFi projects, such as Blocklords, F1 Delta Time, League of Kingdoms, Marble.cards, Sandbox and Xaya.

Usability & Primary Features of Maker (MKR)

When we take a look at the usability surrounding the MKR cryptocurrency, any holder that has MKR in their balance will be able to gain voting rights within the platform’s approval voting system. In this case, MKR holders can vote on the collateralization rate of CDPs.


For their participation, they can get MKR fees as a reward. The holders are incentivized to vote, in a direct way that can provide a broad benefit to the system. If the system works well, the value is maintained or increases for the MKR cryptocurrency.

Protocol

MKR, as a cryptocurrency, is an ERC-20-based token. What this means is that it utilizes Ethereum's protocol in order to function. Furthermore, MKR can also get stored within just about any ERC-20 wallet and is tradeable on a multitude of different exchanges.

Ledger

Maker (MKR) operates on top of Ethereum and, as such, can be analyzed through its public ledger.

Smart-Contract Support

Due to the fact that it is built on top of the Ethereum blockchain and uses smart contracts in order to enable its operations, Maker (MKR) does indeed have full smart contract support. They play an important role within the broader ecosystem.

Tokenomics & Supply Distribution

The initial token that was provided by Maker (MKR) included the following structure and overall distribution.

  • 69.50% gets allocated to Founders & Project
  • 15.00% gets allocated to the Team
  • 4.00% got allocated to Seed Round 1
  • 6.00% got allocated to Seed Round 2
  • 5.50% got  allocated to Seed Round 3

Furthermore, it is also important to note that MakerDAO originally ended up launching with a supply of 1,000,000 MKR tokens throughout its inception.


The total number of MKR in existence can also fluctuate, and this is directly dependent on how the system runs. For example, if the total supply of MKR can increase, based on the belief and analysis that the system is running in a deficit, then as a result of this needs to dilute MKR as a recapitalization source.


However, if the system is maintained and governed well, then the total amount of MKR will decrease due to the fact that MKR gets destroyed in exchange for any excess DAI from the system.

Team & History

When we look at the team, as well as the history surrounding MakerDAO, it is important to note it was founded in 2014 in California by the developer as well as entrepreneur known as Rune Christensen.


Since then, the core management team has increased gradually, and after the first three years of development, MakerDAO launched the stablecoin known as DAI.


At this time, Rune Christensen chose a group of developers, which was later formalized into the Maker Foundation, a company in the Cayman Islands.


When we look at its historical funding rounds, initially, $12 million was raised in the Secondary Token Sale which took place on December 16, 2017, and was funded by Andreessen Horowitz and Polychain Capital, which were then joined by Distributed Capital Partners, Scanate, FBG Capital, Wyre Capital, and Walden Bridge Capital, alongside 1confirmation with an average price of $300.


Then, $15 million got raised in the Secondary Token sale; this occurred on April 23, 2019, and was funded by a16z with an average price of $250.

Furthermore, $27.5 million was raised in the Secondary Token Sale throughout April 2019 by the parties, including Paradigm and Dragonfly capital.

Activities & Community

When we take a look at the Maker (MKR) community, we need to go over its social media channels.

MakerDAO has a healthy community of enthusiasts behind it.

Development Activity and GitHub Repositories

Maker also has its own official GitHub page with multiple repositories. Out of them, the most popular ones include:

  • Multicall - Aggregate multiple constant function call results into one.
  • Awesome-makerdao - A collection of tools, documents, articles, blog posts, interviews, as well as videos related to MakerDAO as well as the DAI stablecoin.
  • Dss - Dai Stablecoin System
  • Developerguides - developer guides which can integrate with MakerDAO's smart contracts, SDKs, APIs, products, as well as partners.
  • Market-Maker-Keeper - A framework for Market maker keepers for OasisDEX, EtherDelta, 0x (RadarRelay, ERCdEX), Paradex, DDEX, IDEX, Bibox, Ethfinex, GoPax, HitBTC, TheOcean, OKEX, and Gate.io.
  • Multicall.js - a JavaScript blockchain state management library created for Decentralized Applications (dApps).

On-Chain Activity

Due to the fact that Maker (MKR) is based on top of Ethereum and, as such, follows the ERC-20 token standard, we can utilize Etherscan as a means of getting an indication as to what kind of performance the cryptocurrency has.


Source: Etherscan


Based on Etherscan data, the value of the MKR cryptocurrency is $660.91.


It has a fully diluted market cap of $646,126,128.63, with a circulating supply market cap of $595,277,267.00.


There are 90,582 holders of the MKR cryptocurrency and a total of 1,788,837 transfers.

Activities and Partners

Throughout its history, MakerDAO has undergone numerous different partnerships. In fact, the Maker Foundation has a large history of creating grant programs or just establishing solid partnerships. These are the most notable examples of these partnerships:

References & Reports

References

Market Research

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