Maker (MKR) is an ERC-20 token built on Ethereum that acts as the governance token of the MakerDAO. The MakerDAO is a decentralized autonomous organization project whose function is to operate Dai(Symbol: DAI), a decentralized cryptocurrency with a stable value soft-pegged to the US dollar. MKR tokens are governance tokens – meaning they function to give voting share for the organization that manages DAI.

A Brief History of Maker (MKR)

MakerDAO was formed in 2014 by Rune Christensen. The Maker ecosystem was one of the earliest projects on the decentralized finance (DeFi) world on Ethereum. The protocol went live in December of 2017.

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The DAI Stablecoin 

MKR was one of the first tokens that allowed its holders to participate directly in protocol governance Dai. Every holder of Maker tokens has the right to vote on changes to the Maker Protocol, with their voting power depending on the size of their MKR stake. Some of the aspects of the protocol the holders can vote on are:

  • Adding new collateral asset types to the protocol, allowing users to submit new cryptocurrencies to mint more DAI
  • Amend the risk parameters of existing collateral asset types
  • Change the DAI Savings Rate: holders of DAI tokens can earn savings by locking them in a special contract, and the Savings Rate impacts the profitability of that contract
  • Choose the oracles — entities whose goal is to supply trustworthy off-blockchain data to the Maker ecosystem
  • Upgrades to the platform

Why was it created:

MKR was created as the governance token for the Maker Protocol. Holders of MKR tokens govern the smart contracts of the Maker Protocol, which in turn powers the Dai token. The Dai token is unique in that it is fully decentralized, but still soft pegged to a realworld asset and offers users the ability to transfer value while potentially reducing volatility. This decentralization is made possible through MakerDAO and the MKR token which provides individuals the ability to vote on how the DAO and Dai operate.

Further details on trading MKR on TradeStation Crypto

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