Is there a limit to how much MKR can be created or destroyed at any given time?
The Maker project is a decentralized autonomous organization (DAO) that operates on the Ethereum blockchain.
The Maker project has its own cryptocurrency, MKR, which is used to pay for transaction fees and other costs associated with the Maker platform. MKR is a non-inflationary asset, meaning that it cannot be created or destroyed at any given time. Instead, MKR tokens are issued and burned in order to maintain the stability of the Dai stablecoin.
The amount of MKR tokens in circulation is determined by an algorithm that adjusts the supply of MKR tokens based on market demand for Dai. In order to ensure that there is no inflation or deflation of MKR tokens, the Maker project has implemented a system called Target Rate Feedback Mechanism (TRFM). This system monitors the price of Dai and adjusts the supply of MKR tokens accordingly.
If the price of Dai rises too quickly, then more MKR tokens will be issued in order to increase demand for Dai and bring its price back down. Conversely, if the price of Dai falls too quickly, then more MKR tokens will be burned in order to reduce demand for Dai and bring its price back up. In this way, there is no limit to how much MKR can be created or destroyed at any given time as it is determined by market forces and adjusted by TRFM.
