UPDATE: The MKR Debt Auction will now take place at approximately 10:28 ET (14:28 UTC) on March 19.

Due to recent market activity and the resulting accumulation of protocol debt in the MakerDAO system, an MKR token auction will occur on the Maker Protocol, March 19th, tentatively starting at 10:28 ET (14:28 UTC) on March 19. to recapitalize the system, as explained in the whitepaper. This auction is open to anyone; however, all participants must run an Auction Keeper, open-source software that enables users to bid in the auction process. 

Details of Auction

• Start time: March 19, 10:28 ET (14:28 UTC) on March 19
• MKR will be auctioned off in lots for 50,000 Dai
• According to parameters of the Maker Protocol as determined by governance, the auction works as in the following example:
  • The protocol offers a Keeper (bidder) a lot of 250 MKR for 50,000 Dai, which translates to a price of 200 Dai/MKR. A second keeper bids 50,000 Dai but only requires 230 MKR, which translates to a price of 217 Dai/MKR. The bid prices increase through the Keepers’ willingness to take slightly less MKR in exchange for 50,000 Dai. 
  • If no one bids on the first lot of 250 MKR, then the auction can be re-initialized after three days, offering 20% more MKR (300 MKR) for 50,000 Dai, which translates to a price of 166.66 Dai/MKR.
  • Finally, if there is at least one bid, and no one outbids it within 6 hours, the auction ends.

Ecosystem players, such as Paradigm, have come forward regarding their intent to participate in the decentralized recapitalization process. 

How to Run an Auction Keeper

As noted above, those interested in participating will need to set up and operate an Auction Keeper. For assistance, review documentation here, or watch this informational video. 

If you have the resources to meet the minimum bid requirements, but have questions about participating, please speak to members of the MakerDAO community, either in MakerDAO’s public Rocket Chat or the MakerDAO forum.

Moving Forward Together

Once again, we thank the community for rallying around Maker and for their enthusiasm to discuss, debate, and decide on the Maker Protocol’s parameters at the height of the recent market tumult. Participation in this auction and in Maker governance by the community and any interested party will serve to strengthen the Maker Protocol now and in the future.