MKR is the governance token of the MakerDAO and Maker Protocol, which run on the Ethereum blockchain and are best known for creating the DAI stablecoin.
Key Features of MKR:
Governance Token: MKR holders vote on decisions that affect the Maker Protocol, including:
Interest rates (stability fees)
Risk parameters for collateral
New collateral types
System upgrades or changes
Protocol Backstop: If the Maker system becomes undercollateralized, new MKR can be minted and sold to cover the debt—this means MKR holders are financially incentivized to govern wisely.
Limited Supply: MKR tokens can be burned (destroyed) when stability fees are paid in the system, potentially making MKR deflationary over time.