MakerDAO is a decentralized finance (DeFi) project that issues the USD-pegged stablecoin DAI, backed by cryptocurrency collateral. Its ecosystem is governed by a decentralized autonomous organization (DAO) through the MKR token. As one of Ethereum's earliest lending protocols, MakerDAO has grown into a cornerstone of DeFi, emphasizing decentralized governance and financial stability.
Latest Updates from MakerDAO
On May 4th, MakerDAO announced plans to launch NewStable (NST), an upgraded stablecoin, and NewGovToken (NGT), a governance token, without replacing existing DAI and MKR tokens. Users can freely convert between old and new tokens. Additionally, MakerDAO will introduce subDAO mining in Q2 2024, enabling liquidity farming with NST.
What is Maker (MKR)?
Founded in 2015 by Rune Christensen, Maker is an Ethereum-based protocol designed to mitigate crypto volatility by stabilizing DAI. It operates as a decentralized credit system, allowing users to borrow DAI against collateral like ETH, WBTC, or USDC. Key features:
- Decentralized Governance: MKR holders vote on protocol changes.
- Overcollateralized Loans: Ensures DAI’s stability (e.g., 150% collateral ratio).
- DAI Savings Rate (DSR): Earn interest by locking DAI in smart contracts.
MakerDAO’s Role
MakerDAO, the governing body, oversees:
- Collateral types (e.g., ETH, USDC).
- Risk parameters (e.g., liquidation thresholds).
- Emergency measures (e.g., debt auctions during crises).
Evolution of MakerDAO
- 2015: Protocol conceptualized.
- 2017: MKR token sale raised $12M from investors like Andreessen Horowitz.
- 2018: DAI stablecoin launched.
- 2023: "Endgame" proposal introduced RWA (Real World Asset) investments, boosting revenue.
DAI vs. MKR: Key Differences
| Token | Purpose | Supply |
|---|---|---|
| DAI | Stablecoin (1 USD peg) | Elastic (based on demand) |
| MKR | Governance (voting, fees) | Fixed (1M max, deflationary) |
DAI is minted via collateralized debt positions (CDPs), while MKR is burned to pay stability fees, reducing supply.
New Tokens: NST and NGT
- NewStable (NST): Enhanced DAI with stronger stability mechanisms.
- NewGovToken (NGT): Encourages broader governance participation.
👉 Learn how to convert MKR to NGT
MKR Tokenomics
- Max Supply: 1,005,577 MKR (97% circulating).
Initial Allocation:
- 69.5% to founders
- 15% to team
- 15.5% to seed investors.
- Deflationary Mechanism: Excess DAI buys and burns MKR.
How Maker Protocol Works
- Proposal Polling: MKR holders gauge sentiment.
- Executive Voting: Approved changes update smart contracts.
- Governance: MKR holders adjust DSR to stabilize DAI’s peg.
MKR Price Analysis
- 2021 Peak: $6,339 (bull market).
- 2022 Low: ~$500 (crypto winter).
- 2023 Recovery: Surged to $1,212 post-RWA expansion and "Smart Burn Engine" launch (monthly $15M liquidity injections).
Current Stats (Sample Data)
- Price: ~$1,212
- Market Cap: $2.68B (Rank #42)
- 24h Volume: $51.8M
MKR Price Forecast (Speculative)
| Year | Low | Avg | High |
|---|---|---|---|
| 2024 | $2,668 | $3,032 | $3,396 |
| 2025 | $3,881 | $4,245 | $4,609 |
| 2030 | $9,947 | $10,311 | $10,675 |
Note: Crypto markets are volatile; predictions are not guarantees.
Risks and Challenges
- Liquidation Risks: Extreme volatility may trigger collateral sales.
- Centralization Concerns: Reliance on USDC as collateral introduces regulatory exposure.
- Oracle Vulnerabilities: Price feed inaccuracies could disrupt CDPs.
Conclusion
MakerDAO pioneers decentralized stability in crypto, with DAI and MKR enabling trustless finance. Its shift toward RWAs and governance upgrades positions it for long-term growth.
👉 Explore MakerDAO’s latest developments
FAQ
Q: Can DAI lose its peg?
A: Rarely. Mechanisms like DSR and overcollateralization maintain stability.
Q: How do I stake MKR?
A: MKR holders vote in governance proposals; staking isn’t required.
Q: What’s NST’s advantage over DAI?
A: Enhanced stability features and liquidity mining options.