What Is Maker and Its MKR Crypto? A Complete Guide
The primary function of Maker's ecosystem is issuing the stablecoin DAI in exchange for Ethereum's Ether (ETH) via smart contracts. MKR falls under governance tokens, enabling holders to vote on critical parameters affecting DAI’s stability—pegged to the US dollar on Ethereum’s blockchain. Though less mainstream, MKR was Ethereum’s first tradable coin and is increasingly monitored by analysts.
Maker Crypto Overview
The MKR token ensures DAI’s price stability—a transparent alternative to Tether (USDT), which faces scrutiny over its dollar reserves. Traders often use stablecoins like DAI to safeguard capital during market volatility.
- ERC-20 Tokens: Both MKR and DAI operate on Ethereum.
- Collateral Model: Mirroring the gold standard, Maker locks assets (e.g., ETH) to back DAI’s value.
How Does Maker (MKR) Work?
MKR’s price is volatile, typical of cryptocurrencies. It powers the MakerDAO protocol with three key roles:
Governance Token:
- Holders vote on protocol changes (e.g., stability fees, collateral rules).
- Example: Recent votes adjusted DAI loan interest from 0.5% to 1%.
- Proposals have a 24-hour delay to prevent malicious changes.
Stability Mechanism:
- 150% Collateral Requirement: Users lock ETH to borrow DAI.
- If ETH’s value drops, MKR auctions convert excess DAI to MKR, maintaining DAI’s dollar peg.
Utility Token:
- Borrowers pay fees in MKR, which are then burned.
- No staking rewards—value derives solely from price fluctuations.
Who’s Behind Maker Crypto?
Founded in 2015 by Rune Christensen (a Danish entrepreneur with a biochemistry background), MakerDAO now employs ~35 people. Key hires include Søren Peter Nielsen (Product Lead since 2018).
Can You Mine Maker (MKR)?
No—MKR isn’t minable like Bitcoin. However:
- Token Generation: New MKR tokens minted during undercollateralization to cover DAI shortfalls.
- Token Burning: Excess DAI buys back and burns MKR to stabilize supply.
- Market-Dependent: MKR’s supply adjusts based on DAI’s ecosystem health.
How to Store MKR Tokens
Use these secure wallets:
| Type | Examples | Security Level |
|---|---|---|
| Hardware | Ledger Nano S/X, Trezor | High (Offline) |
| Software | MetaMask, Trust Wallet | Medium (Online) |
Where to Buy Maker (MKR)?
MKR isn’t directly purchasable with EUR. Follow these steps:
- Buy BTC/ETH on platforms like Coinbase, Binance.
- Trade BTC/ETH for MKR on exchanges supporting pairs like ETH/MKR.
Tracking Maker’s Price
MKR peaked at ~€5,000 in 2021 but dropped 50%+ later. Monitor real-time data on:
- CoinMarketCap
- Binance
FAQ Section
Q: Is MKR a good investment?
A: Its volatility offers trading opportunities, but lacks passive income (e.g., staking rewards).
Q: How does MakerDAO ensure DAI’s stability?
A: Through overcollateralization (150% ETH backing) and MKR token auctions.
Q: Can I vote with minimal MKR holdings?
A: Yes—each MKR equals one vote, but large holders dominate major decisions.
👉 Discover more about MKR’s latest trends
👉 Explore secure hardware wallets for MKR
Final Notes:
- MKR’s value hinges on DAI’s adoption and Ethereum’s ecosystem growth.
- Always verify data via multiple sources before investing.