Maker’s current price is $1,876.29**, with a 24-hour trading volume of **$43.45 million. MKR has a max supply of 1 million tokens.
What Is Maker (MKR)?
Maker (MKR) is a decentralized lending platform enabling over-collateralized loans through smart contracts. Users lock Ether (ETH) to mint Dai, a stablecoin pegged to the US dollar. Dai’s stability relies on:
- Collateralized Debt Positions (CDPs)
- Autonomous feedback mechanisms
- Incentivized external actors
Dai can be used for payments, transfers, or long-term savings.
History of Maker
- 2014: Protocol development began.
- 2015: Founded by Rune Christensen in Denmark.
- 2017: Launch of the Dai stablecoin.
- 2019: Governance transitioned to MakerDAO, a decentralized autonomous organization (DAO).
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How Maker Works
Key Components:
MKR Token:
- Pays transaction fees.
- Governs protocol upgrades (e.g., risk parameters, CDP types).
- Burned when loans are repaid.
Stabilization Mechanisms:
- Dynamic CDP adjustments.
- External market incentives.
Governance:
- MKR holders vote on proposals.
Example:
If ETH drops in value, CDPs are liquidated to maintain Dai’s $1 peg.
Use Cases of Maker
- Decentralized Lending: Borrow Dai without intermediaries.
- Stablecoin Utility: Hedge against crypto volatility.
- Transparency: Auditable reserves vs. opaque centralized stablecoins.
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FAQs
1. How is Dai different from other stablecoins?
Dai is algorithmically stabilized via CDPs, unlike fiat-backed stablecoins (e.g., USDT).
2. Can MKR tokens be staked?
No, but MKR holders govern the protocol and earn voting power.
3. What happens if a CDP is undercollateralized?
It’s liquidated to protect Dai’s peg.
Key Takeaways
- MKR powers MakerDAO’s governance.
- Dai offers a trustless stablecoin solution.
- The protocol balances transparency and decentralization.
For deeper insights, visit MakerDAO’s official resources.
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