What is the MKR token?
MKR is the native token of the Maker platform, a decentralized autonomous organization (DAO) on the Ethereum blockchain.
The Maker platform is designed to create a stablecoin called Dai, which is pegged to the US Dollar and backed by collateral held in smart contracts. MKR tokens are used to govern the Maker platform and are used to pay for transaction fees, reward users for providing liquidity, and pay for governance decisions. MKR tokens are also used as collateral for Dai loans.
MKR tokens are created through an auction process called a “stability fee”. This fee is paid by users who borrow Dai and is distributed among MKR holders as a reward for providing liquidity to the system. MKR holders can also vote on proposals that affect the system, such as changes in interest rates or collateral requirements.
The voting process is done through a decentralized application (dApp) called OasisDEX, which allows users to submit and vote on proposals. The value of MKR tokens is determined by supply and demand in the open market, just like any other cryptocurrency. As more people use Dai and more people hold MKR tokens, the value of MKR increases due to increased demand.
