Maker token supply: how MKR is minted, burned, and migrated
MKR supply is not fixed: the protocol mints tokens for bad debt and burns tokens bought with surplus Dai, with holders voting on the rules behind both.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- The Dai supply is a separate number from MKR supply.
- Bad debt triggers a mint and an MKR auction for Dai.
- Surplus stability fees buy and burn MKR.
- MKR holders vote on the rules; Sky replaced MakerDAO in August 2024.
MKR is the governance token of MakerDAO, the system behind the Dai stablecoin. Its supply moves through two events: a mint that covers bad debt, and a burn paid for with surplus fees. Both leave public records you can check.
What to know before you start
MKR does not have a fixed supply. The count changes only when the protocol mints tokens to cover a shortfall, or burns tokens bought with surplus fees. The Dai supply is a separate number that moves for its own reasons.
How MKR supply changes step by step
Supply changes when the protocol reacts to bad debt or to a fee surplus. MKR holders set the rules for both. Follow the four events below in order.
- 1Watch for bad debtWhen a sale of collateral does not cover a loan, the protocol mints new MKR and auctions it for Dai.
- 2Track surplus DaiInterest paid in Dai becomes surplus, which the protocol uses to buy MKR on the market and burn.
- 3Follow the votesMKR holders have voted on fees and debt limits since Dai launched in December 2017. Voting power matches holdings, and the votes decide when and how much MKR is minted or burned.
- 4Note the Sky rebrandMakerDAO rebranded as Sky in August 2024, and holders can convert MKR to SKY at a set rate. That changes the token, not the mint and burn rules.
How to check and record supply
Etherscan is a public Ethereum block explorer that shows the MKR contract, its transfers, and burn transactions. The Sky governance dashboard shows the votes behind them. Record what you find with the date.
Frequently asked questions
MKR holders do, through governance votes. They approve changes to the contract settings that control how much Dai the system can issue and what borrowers pay.
Governance can approve more minting and another auction until the shortfall is covered. Each round adds tokens and spreads the loss among holders.
The IRS treats crypto as property, and trading one token for another is usually taxable. Converting MKR to SKY is a trade, so you generally report a gain or a loss based on the value at conversion.
