Maker (Ethereum)

MKR

MKR is the governance and utility token of the Maker protocol that also serves to recapitalize the lending system.

Risk Rating
Best
$2,812.06
1.31%
Summary
What we like
MKR holders govern the lending platform with the ability to vote on various protocol parameters, risk management and strategic business decisions.
What we like less
During periods of high market volatility, bad debt may occur resulting from loans becoming undercollateralized. This results in the system printing MKR tokens to be sold for DAI to make up the debt shortfall, thereby increasing the circulating supply and diluting token holders.
What it means for you
Holding MKR can be a great way to indirectly benefit from the success of the platform over time as surplus fees are used to buyback and burn MKR. This adds deflationary pressure on supply and upward price pressure.
Information
Blockchain
  • Ethereum
Key Metrics
  • Market Cap: $2.6B
  • Fully Diluted Valluation: $2.8B
  • FDV / MC: 1.1
  • Ranking inside Exponential (excluding stables): #13
  • Circulating Supply: 927,625
  • Total Supply: 977,631
  • Total Supply: 1,005,577
  • Volume (24H): $73.9M
  • ATH: $6,292.31 (05/03/2021)
  • ATL: $168.36 (03/16/2020)
Risk Assessment
Best
Asset Strength

MKR is a mid-cap asset that represents the blockchain`s native currency or monetary fee used to execute transactions on the network. This asset is exposed to the underlying risks of Maker, a protocol rated as Good.

Asset Tokenomics

MKR has an uncapped supply but has inflation control or burn mechanisms in place.

Asset Volatility

MKR is highly correlated to the overall market.

Dependencies

Maker

Things to know about MKR

What is MKR used for?

The MKR token has two main uses cases: governance and securing the protocol. MKR holders govern the future direction of the platform through community voting on various parameters such as the stability fee, debt ceiling, types of collateral to be used, and more. Second, MKR tokens act as the backstop for debt shortfalls, or when loans become undercollateralized during extreme market conditions. In the scenario when the collateral price drops sharply or no one wants to buy the collateral, bad debt may accrue in liquidated vaults that cannot be repaid through a typical collateral auction (winning bidder pays DAI for collateral from a liquidated vault). Instead, the bad debt must be addressed by the system through minting of new MKR tokens in exchange for DAI. This increases the amount of MKR in circulation and comes at the expense of current token holders as their value is diluted.

MKR tokenomics

MKR launched with an initial supply of 1M tokens. MKR has distributed these tokens to the founders and early adopters through three private sales. Supply will expand and contract through its burn and mint model based on surplus fees and debt shortfalls.

How does MKR accrue value?

Maker currently does not have a direct revenue accrual mechanism. Instead, MKR token holders indirectly benefit from surplus fees generated from stability fees collected from vaults. Surplus DAI accrued from stability fees are auctioned off for MKR tokens, which are then subsequently burnt to reduce the circulating supply and increase token scarcity.

MKR Pools
Uniswap MKR-USD Market Making
3.5%
Yield
$160M
TVL
Risk
B
Protocol
Uniswap V2
Chain
Ethereum