Blockchain Investor Analysis

Maker

MKR
Current Price $729.66 (-6.3%)
The MakerDAO project issued the MKR token in order to fund and manage the protocol that operates the dollar-pegged stablecoin Dai (DAI).

Our Rating:

Market

Problem that it solves

MakerDAO does an excellent job of solving the problem of price instability. It gives users a stablecoin, called Dai, that maintains its value regardless of what the market does. MKR is used in the governance process of the Maker Protocol.

Customers

Individuals interested in maintaining strong governance for the Maker Protocol.

Value creation

The MKR token is key in the governance of the Maker Protocol. However, beyond that it has little to no use case.

Market structure

The MKR token is used in the governance structure of the MakerDAO. Therefore, its market is very concentrated to a handful of stakeholders within the Maker ecosystem.

Market size

The MKR token serves a very small market that is limited to stakeholders in the Maker ecosystem.

Regulatory risks

Maker could face regulation if regulatory bodies disapprove with its pro-inflationary approach to maintaining value. In a nightmare scenario, Maker could get devalued to the point where it destabilizes an economy. Regulators wouldn't like that.

Average Market Score

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Competitive Advantage

Technology/blockchain platform

Maker uses the Ethereum blockchain.

Lead time advantage

Maker's lead time advantage was small in terms of the stablecoin. However, as the most successful crypto-collateralized stablecoin it is a novelty in the market.

Contacts and networks

Maker is the closest thing to a truly decentralized autonomous organization (DAO). However, its head, Rune Christensen, is well-connected in the industry.

Average Competitive Advantage Score

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Management Team

Entrepreneurial Team

Maker is 'managed' by Rune Christensen, who looks forward to stepping back and dissolving his role. So far, his management efforts have been successful.

Industry/technical experience

The team behind MakerDAO has put in considerable work, but the Dai stablecoin itself is the only testament to their qualifications.

Integrity

Maker's Rune Christensen is very transparent—even about how he eventually wants nothing to do with the project. Integrity doesn't seem to be an issue here.

Average Management Team Score

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Token Mechanics

Token required

The MKR token is required in MakerDAO for the stablecoin, DAI, to function.

Value added

MKR is unique as it helps to give DAI its price stability.

Decentralized

The MakerDAO project is, in some ways, a nearly perfect example of decentralization.

Token supply

The token supply needs to be flexible in order to adjust for the volatility of the cryptos it has to represent during transactions.

Public exchange

MKR and DAI is available on many leading exchanges but not on all.

MVP

The MakerDAO project has been running since 2015, but the Single-Collateral Dai has been in use since 2017 and has been a viable product since then.

Average Token Mechanics Score

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User Adoption

Technical difficulty

The technology and methodology behind the stablecoin DAI and MKR are rather complex for the average person to understand.

Halo Effect

MakerDAO has a strong affiliation with Ethereum and its functional connection to the U.S. dollar helps prop it up as well.

Buzz

The buzz about Maker is strong and largely positive. Many regard it as a leading force in the decentralized finance (DeFi) movement.

Average User Adoption Score

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Overall Score

Weighted Average of the five section scores above

Blockchain Investor Analysis

MakerDAO has given the world what appears to be a viable stablecoin. Its decentralized structure built on the Ethereum blockchain help make it a DeFi crowd favorite. The MKR token provides everyday people the chance to influence an already powerful movement that seems to be gaining steam.

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