MKR

Maker (MKR) is a governance token used by stakeholders to keep the system running and Dai in check. MKR token holders make decisions for the Maker Protocol, which is supported by the greater public community and a variety of other external stakeholders.

Additionally, the MKR token is an ERC20 token that serves the following purposes:

The governance mechanism of the protocol is designed to be flexible. The MKR token allows the holders to make changes via a vote to the Maker protocol. The voters can decide whether to add any new type of asset as collateral. They can modify the risk parameters of the current collaterals. Furthermore, the voters can trigger an emergency shutdown. Moreover, the holders can upgrade the system by submitting new proposals.

The token works as a recapitalization (restructuring a company's debt-to-equity ratio) resource for the Maker platform to balance the demand and supply of Dai tokens generated in the auction process.

The MKR token is the cryptocurrency of the platform.

Maker vaults are smart contracts that can be used to leverage collateral assets to generate Dai tokens. Smart contracts are just like regular contracts; however, instead of being drafted on paper, these contracts run in the form of protocols on blockchain.