MKR token-a token that performs management functions and a recapitalization generator for the Maker Protocol-a set of smart contracts that generates new DAI.
Consider the MKR as a function of management. Project management is conditionally two-level — this is the main team, which has about 50 employees and the DAO system is a decentralized autonomous organization. The essence of the DAO is to make changes to the current parameters, determine its further development. This is done by all members of the community who own MKR service tokens, through voting.
Voting takes place on the site https://vote.makerdao.com/. Proposals that receive the required number of votes from MKR holders go into further implementation.
MKR as a source of recapitalization. To take out a loan, users put their tokens in special vaults as collateral. This is how DAI is created. This collateral provides the price of DAI.
If the rate of the pledged crypt changes dramatically, and the collateral becomes insufficient to secure the value of DAI, then the system liquidates the unsafe storage-the collateral is forcibly sold. But if the collateral sold is not enough to fully repay the debt, then there is a threat to the stable value of some of the DAI in circulation.
In this case, Plan B is launched in the Maker Protocol-new MKR tokens are generated, which are put up and sold at auction for DAI, and the system pays off the remaining part of the debt. This process of creating additional mkrs is called recapitalization.
Conversely, if there is a surplus of collateral, then the extra DAI is sold for MKR and later these tokens are burned.
