MKR

MKR is the governance token of MakerDAO, a decentralized finance protocol built on the Ethereum blockchain that enables users to generate DAI, a stablecoin pegged to the US dollar. MKR token holders participate in the governance of the protocol by voting on critical parameters such as stability fees, collateral types, and risk management decisions that affect the entire system. The protocol allows users to lock cryptocurrency collateral (such as ETH, USDC, or other approved assets) into smart contracts called Vaults to generate DAI stablecoins, which can then be used across the broader DeFi ecosystem. MKR holders are economically incentivized to vote responsibly, as they bear the financial risk of protocol insolvency through a recapitalization mechanism where new MKR tokens are minted if the system accumulates bad debt. Since its launch in 2014, MakerDAO has become one of the largest decentralized stablecoin issuers in cryptocurrency, with tens of billions of dollars in total value locked, making MKR a significant governance token in the DeFi sector.