What Is the Role of the MKR Token in the MakerDAO Ecosystem?
The MKR token is the governance token of the MakerDAO ecosystem. Its holders are responsible for managing the protocol's risk by voting on key parameters, such as stability fees, collateral types, and the liquidation ratio.
Crucially, MKR also acts as a last-resort backstop. If the system faces a deficit due to unrecoverable debt from liquidations, new MKR tokens are minted and sold to recapitalize the system, diluting existing holders.
Glossar
MakerDAO
Governance ⎊ The MakerDAO protocol, at its core, represents a decentralized autonomous organization (DAO) governing the creation and stability of DAI, a cryptocurrency pegged to the US dollar.
MKR Holders
Governance ⎊ MKR Holders represent stakeholders within the MakerDAO ecosystem possessing voting rights proportional to their MKR token holdings, directly influencing protocol parameters and risk management decisions.
MKR Token
Governance ⎊ The MKR Token functions as the governance asset for the MakerDAO protocol, granting holders the right to vote on key operational and risk parameters for the decentralized stablecoin Dai.