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Maker is a permissionless, multi-asset, overcollateralized smart contract lending platform based on the Ethereum blockchain. It allows users to take out decentralized loans by locking-in collateral in exchange for $DAI, an algorithmic stablecoin.










Token Strength.

Token Utility:

- $DAI (spending token): users borrow $DAI by overcollateralizing digital assets. They pay a stability fee for borrowing (interest) and receive back collateral when repaying their debt. A liquidation auction may occur if collateral value drops below liquidation price. $DAI can also be locked to generate yield (DSR)
- $MKR (gov token): $MKR holders own voting rights. If a debt auction occurs (loan>collateral), $MKR are minted. Else $MKR are burnt in the case of surplus auction (loan<collateral)

Demand Driver:

- $MKR holders: incentivized by governance rights
- Keepers: in a surplus auction keepers buy $MKR and compete each other in an increasing bid auction to receive a fixed quantity of $DAI, in a debt auction keepers try to acquire $MKR at a discounted price to let protocol quickly cover the debt

Value Creation:

- $DAI generation, which is the major algorithmic stablecoin
- First-mover advantage of being one of the former lending systems and well-structured DAO protocols in the entire DeFi ecosystem
- Simple stablecoins swap function
- Possibility to use RWA (Real World Assets) as collateral for borrowing $DAI
- No KYC, non-custodial wallet service

Value Capture:

- Governance rights: $MKR holders benefit from managing one the most considerable web3 treasuries by controlling stability fees, DSR, PSM, collateral liquidation price, and asset collateralization ratio
- If the protocol makes good lending decisions can generate profits in the form of $MKR burnt since $DAI received from borrowers are converted into $MKR in an auction and consecutively burnt

Business Model:

- Lending income: interest revenues from loans (Stability Fees)
- Liquidation income: liquidation penalties from liquidated vaults
- Trading fees: stablecoin trading fees from the Peg Stability Module (PSM)
If MakerDAO can generate good lending decisions, more $MKR are burnt, increasing its value (surplus auction). On the contrary, $MKR is diluted to face a debt auction and potentially lose value


Protocol Analysis.

Problems & Solutions
- The protocol issues an algorithmic stablecoin, fully backed by crypto assets (now, also by RWA). On the opposite of traditional stablecoins, which are pegged to the dollar only
- Borrowing is accessible to all in a decentralized way with a non-custodial wallet, with no need to KYC
No predecessors

Investment Take

... coming soon

Tokenomics Timeline.

  1. 2017-12-18


    Token Generation Event and Single Collateral Dai (SCD) launch

  2. 2019-11-19

    MCD transition & DSR

    Multi Collateral Dai (MCD) transition and introduction of the Dai Savings Rate (DSR)

  3. 2020-03-25

    Fully decentralization

    Transfer of $MKR token control from the Maker Foundation to the Maker governance community

  4. 2022-07-07

    RWA: US treasury & corporate bonds

    Maker invests 500M worth of $DAI into US treasury and corporate bonds

  5. 2022-08-23

    RWA: HVB loan

    Maker approves a credit line of 100M $DAI to Huntingdon Valley Bank: the first integration between a decentralized finance protocol and a traditional bank


Allocation and Emission.

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