Maker (MKR): the Governance Token for the Maker Protocol

Presentation and explanations of how the Maker (MKR) works. Find out how to get some MKR and how to start using it.
Maker MKR explained review tutorial

What is Maker Token (MKR)

 

Maker (MKR) cryptocurrency review

 

Maker is a utility token that allows holders to govern the Maker system. When you own Maker tokens, you’re practically a stakeholder in the broader Maker ecosystem. By owning these valuable Maker tokens (MKR), you’re able to take a crucial part in maintaining the entire Maker ecosystem. This includes making decisions that affect the DAI (the stablecoin for the MakerDAO system).

This is what many call “influence through ownership.” By owning this token, you wield your influence on the maker system by making decisions and voting on risks that affect the Maker system’s future. This is no simple responsibility.

The MKR token value is tied to the success of its outcomes and the upkeep of the Maker system and its stablecoin, DAI. 

Maker token (MKR) is an ERC-20 token (built on the ethereum blockchain network), and it aims to stabilize cryptocurrency prices and drive up mainstream adoption of crypto.

Maker tokens (MKR) are highly valued, making it more stable than most cryptocurrencies in the market. 

However, most cryptocurrency enthusiasts are inquisitive, where does Maker (MKR) get its value?

It’s simple. MKR’s value is tied to that of the DAI ( a decentralized stable coin built on the maker system with its value pegged to the US dollar). 

At any point in time, 1 DAI = $1.

1 dollar is one DAI

The MKR token objective is to stabilize the DAI with the US dollar through the use of CDPs (collateralized debt positions).  

The CDP allows users to deposit their assets into a smart contract. This asset deposited is considered as collateral for a loan. Once this asset has been deposited, you can obtain an equal value in DAI. A direct link exists between the amount used for the CDPs and the DAI. The more people need DAI, CDP will increase, which means more Maker (MKR) Tokens.

How MKR Is Used on MakerDAO

The maker token (MKR) has three main uses in the Maker ecosystem.

Utility

Maker has intrinsic value, and it’s used to pay fees on CDPs. When fees are paid MKR tokens are burnt (i.e., destroyed, in crypto speak) from the total supply. This creates a demand and supply situation. If the demand for CDPs and the DAI increases, we are surely getting an increase in the demand for MKR tokens and consequently, the price.

 

Protocol Governance 

MKR tokens are used for governing the Maker system. The governing process involves voting for decisions that will affect how the Maker platform is run. Voting on the Maker platform goes through a process called Continuous Approval Voting. You can vote on processes with the amount of MKR tokens you hold, you can also create and submit new proposals you think will be beneficial to the future of the platform. 

Other uses include:

  • Upgrades to the MakerDAO platform when needed.
  • Change the lending and saving rate of the DAI.
  • Amending the risks of existing collateral types.
  • Adding new asset types to the Maker protocol.

MKR gives users the power to decide on what happens on the MakerDAO system and Maker protocol. If you own MKR, then you’re directly involved in governing one of the most important projects in the DeFi space — it’s that simple.

The Maker token is one of the most valuable tokens in the cryptocurrency market because of these features. Everyone loves to be involved in the governing process which automatically drives up the value of MKR in the market.

DAI is one of the most popular stablecoins. By market cap, it’s ranked as the 25th largest cryptocurrency in the industry and one of the most important DeFi projects.  

The ability to govern the decisions that determine the future of the DAI is what makes MKR tokens so unique and so sought after by many cryptocurrency investors even with the high rate of volatility.

Maker (MKR) Metrics

With a circulating supply of 1,003,154 MKR tokens and a total market cap of $555,042,528, MKR (34,559 BTC) ranks 36th on the list of top cryptocurrencies on CoinMarketCap

As of the time of this writing, MKR was listed at $544.81 (0.03445026 BTC) with a 24-hour trading volume of $39,889,450 (2,522 BTC), according to Coingecko.

The total value locked in BTC is 145,977BTC with a 24-hour high of 0.03587841BTC and a 24-hour low of 0.03297450BTC, according to Bitcoin.com.

Who Are the Creators of Maker (MKR)?

The Maker ecosystem which includes the DAO and MKR token was developed in 2017 by a Danish Entrepreneur Rune Christensen. 

Before creating Maker, Rune Christensen already founded the Try China International Recruiting Company. Christensen finished from Copenhagen University with a degree in biochemistry and studied business at the Copenhagen Business School.

The MakerDAO team consists of over 55 team members and 5 board members with the CEO Rune Christensen and the COO Steven Becker also serving as board members. 

What Is the Future of Maker (MKR)?

Many cryptocurrency enthusiasts and MKR token holders have been asking what the future holds for the MKR token and the Maker Ecosystem itself. From the antecedents of this project, we can expect a bright future. 

Back in July 2017, Coindesk reported that the DAO total value of cryptocurrency locked in Maker crossed $1 billion and the entire value of all DeFi protocols was about $3.3 billion. 

However, as of the time of writing this article, the total value locked in DeFi has surpassed $13 billion with the value of cryptocurrency locked in the Maker protocol reaching $2.7 billion in the same period.

Where Can You Purchase MKR?

MKR can be traded on several exchanges. According to coingecko, here is the list of the different exchange pairs available for MKR.

We recommend you to use Binance. If you are not comfortable with the exchange, feel free to read our tutorial here.

Binance

Conclusion

Maker Token (MKR) was created with the right resources to help a system that aligns voters’ interests with the interest of the system itself. This is the genius of the platform and token that makes it so valuable. 

By acting as a utility and governance token, and also a resource for recapitalization, the MKR token is surely an integral piece in the operation and success of the MakerDAO ecosystem.

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The information above contains information on the cryptocurrency market, which is associated with high risks. These materials are presented for informational purposes only and in no way should be construed as a recommendation for the purchase or sale of the assets. Any person considering trading digital assets should seek independent advice on the suitability of any particular digital asset.

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