Maker

Maker refers to an Ethereum-based software platform (the Maker Protocol) and the decentralized organization that governs it (MakerDAO). The system allows users to lock crypto assets as collateral in smart contracts known as vaults and mint DAI, a decentralized cryptocurrency soft-pegged to the US dollar. Users can retrieve their collateral by returning the borrowed DAI; if collateral value falls below required levels, the protocol automatically liquidates the vault's contents to cover the outstanding obligations. As of 2020 the protocol accepted eight collateral cryptocurrencies, including ETH, MANA and BAT. [1][2]

The protocol uses two tokens. DAI is the stablecoin product; MKR is the governance asset. MKR holders vote on protocol changes through Proposal Polling (sentiment gauging) followed by Executive Voting (which, if passed, changes protocol code); voting weight is determined by the quantity of MKR committed rather than the number of holders. Governance decisions cover adding new collateral asset types, adjusting risk parameters, setting the DAI Savings Rate (historically as high as 8.75% per annum and as low as 0%), selecting oracles that supply off-chain data, and approving platform upgrades. A third, non-binding form of participation is available to non-MKR holders via the MakerDAO forum. [1][2]

MKR supply is dynamic and has no hard cap. When system fees accumulate beyond a threshold set by governance, Surplus Auctions sell excess DAI for MKR, which is then burned, reducing supply. When liquidations leave the system undercollateralized, Debt Auctions mint and sell new MKR for DAI, increasing supply. One million MKR were created at launch. CoinMarketCap indicates Maker (MKR) has been rebranded to Sky (SKY), and the protocol's documentation site is now branded Sky Ecosystem / Sky Protocol Docs, pointing to sky.money for the portal, vote.sky.money for governance and a GitHub organization at sky-ecosystem. [0][1][2]

Founding story

MakerDAO was created in 2015 by a group of developers led by Rune Christensen, an entrepreneur from Sealand, Denmark, who graduated from Copenhagen University with a degree in biochemistry and studied international business at Copenhagen Business School. Before MakerDAO he co-founded and managed the international recruiting company Try China. The developer group was later formalized into the Maker Foundation, a Cayman Islands company. [1][2]

Business model

Maker operates as a decentralized protocol rather than a conventional company: revenue accrues to the system in the form of stability fees paid by users who lock collateral to generate DAI. Surplus fees are auctioned for MKR, which is burned, so protocol usage is intended to reduce MKR supply; conversely, undercollateralized liquidations cause new MKR to be minted and sold, diluting holders. MKR pays no dividends and functions as a governance/voting share whose value is tied to adoption and sound governance of DAI. [1][2]

The protocol collects fees from users who lock cryptocurrencies to generate DAI. Accumulated surplus DAI is sold in Surplus Auctions for MKR, which is destroyed; shortfalls are covered by Debt Auctions that issue new MKR for DAI. [2]

Traction

CoinMarketCap reports an MKR price of $1,531.70, a market capitalization of about $1.29 billion, 24-hour volume of roughly $259,560, total supply of 870,820 MKR against a 1 million maximum supply, self-reported circulating supply of 847,220 MKR (84.72%), about 79,640 holders, and protocol TVL of $5.72 billion. The all-time high was $6,339.02 on 2021-05-03 and the all-time low $21.06 on 2017-01-30. A CertiK rating of 4.5 is listed. [1]

Latest developments

Maker (MKR) has been rebranded to Sky (SKY), and the former MakerDAO documentation site now presents as Sky Protocol Docs under the Sky Ecosystem name, with the portal at sky.money, governance at vote.sky.money, a chainlog at chainlog.sky.money and code at github.com/sky-ecosystem. Documentation is released into the public domain under CC0 1.0 Universal. [0][1]