What Is Maker?

Maker (MKR) is the governance token of the MakerDAO protocol, a decentralized lending platform built on Ethereum that issues DAI, one of the most widely used decentralized stablecoins. Founded by Rune Christensen in 2015 and launched on Ethereum's mainnet in December 2017, MakerDAO pioneered the concept of over-collateralized crypto lending and has been a cornerstone of the decentralized finance (DeFi) ecosystem since its inception. The protocol has been described as a "DeFi central bank" — it manages a stablecoin's monetary policy through algorithmic mechanisms and community governance rather than through a traditional financial institution.

Overview - Table of Contents
What Is Maker?
Getting Started With Maker
How To Get A Maker Wallet?
Maker Resources
How To Buy Maker?
Latest Maker News

DAI: The Decentralized Stablecoin

The core product of the Maker protocol is DAI, a stablecoin designed to maintain a 1:1 peg with the US dollar. Unlike centralized stablecoins such as USDT or USDC that are backed by dollars in bank accounts, DAI is generated when users deposit collateral into Maker Vaults (smart contracts on Ethereum) and borrow DAI against it. These vaults were originally called Collateralized Debt Positions (CDPs) in the protocol's early single-collateral phase, when only Ether could be used as collateral.

The system requires over-collateralization — users must deposit more value in collateral than the DAI they borrow. For example, at a 150% collateralization ratio, depositing $150 worth of ETH allows a user to borrow up to 100 DAI. This excess collateral creates a buffer that protects the system even during market downturns. Users pay a Stability Fee (an interest rate on their borrowed DAI) set by MKR governance, which serves as a lever to regulate DAI supply and maintain the peg.

Multi-Collateral DAI and Real-World Assets

In November 2019, the protocol upgraded from Single-Collateral DAI (which accepted only ETH) to Multi-Collateral DAI (MCD), enabling a wide range of collateral types including WBTC, stablecoins, and other ERC-20 tokens. This upgrade also introduced the Dai Savings Rate (DSR), which allows DAI holders to earn yield by depositing their DAI into a savings contract — functioning similarly to a savings account but fully on-chain and governed by the protocol.

A major strategic shift came with the addition of real-world assets (RWAs) as collateral. The protocol began onboarding tokenized US Treasury bills, corporate credit facilities, and other traditional financial assets through partnerships with entities like NewSilver (real estate lending) and BlockTower Credit (structured credit). RWA collateral has become a significant portion of Maker's backing and revenue, substantially increasing the protocol's stability and income while bridging DeFi with traditional finance.

Liquidations and Risk Management

If the value of collateral in a vault drops below the required collateralization ratio, the vault is liquidated. The Maker protocol uses an auction system managed by "Keepers" — automated bots that bid on liquidated collateral and help the system maintain solvency. The protocol learned hard lessons about this mechanism during "Black Thursday" on March 12, 2020, when a sudden crash in ETH prices triggered a cascade of liquidations. Network congestion caused many Keepers to fail, and some vaults were liquidated for near-zero bids, resulting in approximately $8 million in under-collateralized debt. The protocol recovered by auctioning newly minted MKR tokens to cover the deficit — demonstrating MKR's role as the system's recapitalization mechanism.

MKR Governance

MKR holders govern the Maker protocol by voting on key parameters: which collateral types to accept, the risk parameters for each collateral type, Stability Fee rates, the Dai Savings Rate, and protocol upgrades. Governance is conducted through weekly polls and executive votes on the Maker governance portal. MKR also functions as a backstop: if the system becomes undercollateralized, new MKR tokens are minted and auctioned to cover bad debt. Conversely, when the protocol earns surplus revenue from Stability Fees, MKR tokens are bought back and burned, reducing supply. This mechanism gives MKR holders both governance power and direct financial exposure to the protocol's health.

The Endgame Transition

The protocol underwent a major restructuring under the "Endgame" plan, transitioning to a new organizational structure with SubDAOs focused on different aspects of the protocol. As part of this transition, MKR was rebranded to SKY and DAI to USDS, though the original tokens remain functional through a bidirectional migration process. The Endgame plan also introduced the Spark Protocol for lending and borrowing, and established a framework for SubDAOs to operate semi-independently while remaining connected to the core protocol. DAI has expanded to multi-chain availability, accessible on Ethereum, Arbitrum, Optimism, and other networks.

Getting Started With Maker

Getting started with the Maker ecosystem:

Step 1: Set up an Ethereum wallet like MetaMask.
Step 2: Purchase MKR or DAI from a cryptocurrency exchange.
Step 3: To generate DAI, deposit collateral into a Maker Vault through the Maker app.
Step 4: Participate in governance by holding MKR and voting on proposals at the governance portal.

How to Get a Maker Wallet?

MetaMask

MetaMask is the most common wallet for interacting with the Maker protocol. Since MKR and DAI are Ethereum-based tokens (ERC-20), they work with any Ethereum wallet. MetaMask connects directly to the Maker governance portal and the Maker app for vault management.

Hardware Wallets

Ledger and Trezor hardware wallets support MKR and DAI as ERC-20 tokens. These can be used with MetaMask or directly through their respective interfaces for secure storage and governance participation.

Coinbase Wallet

Coinbase Wallet (the self-custody wallet, separate from the Coinbase exchange) supports MKR and DAI and can connect to DeFi applications including the Maker protocol.

Maker Resources

How to Buy Maker?

MKR is available on most major cryptocurrency exchanges:

Centralized Exchanges

MKR can be purchased with fiat currency on Coinbase, Kraken, Binance, and other major exchanges. Most offer MKR/USD and MKR/ETH pairs. After purchasing, transfer MKR to a personal wallet if you want to participate in governance or hold long-term.

Decentralized Exchanges

MKR is widely traded on Ethereum DEXs including Uniswap and Curve. DEX aggregators like 1inch can find the best rates across multiple liquidity sources.

Latest Maker News

The Maker protocol has undergone a major transformation through the "Endgame" plan, rebranding to Sky Protocol with new tokens SKY and USDS while maintaining backward compatibility with MKR and DAI. The protocol has significantly expanded its real-world asset portfolio, becoming one of the largest holders of tokenized US Treasuries in DeFi. Revenue and DAI supply have grown substantially, and the SubDAO structure is creating specialized units focused on different aspects of the protocol's operations.