What is the use of MKR coin?

The MKR token plays a pivotal role in the governance structure of the platform, empowering holders with the authority to cast their votes on critical parameters. These include, but are not limited to, the stability fee, which acts as a deterrent against excessive borrowing, ensuring the stability of the system.

Furthermore, MKR holders have a say in determining the debt ceiling, a threshold that restricts the total amount of Dai that can be generated. This mechanism helps prevent the system from becoming overleveraged and maintains its financial health.

The types of collateral accepted for generating Dai are also subject to the collective decision of MKR holders. This flexibility allows the platform to adapt to changing market conditions and accommodate a diverse range of assets, fostering innovation and growth.

Additionally, the Dai Savings Rate, which incentivizes users to save Dai rather than spend it, is another parameter that can be adjusted by MKR holders. This feature promotes responsible usage of Dai and contributes to its stability as a digital currency.

Beyond governance, MKR tokens also serve a practical purpose within the system. They can be used to purchase excess Dai from collateral auctions, where users who fail to meet their obligations have their collateral liquidated to repay their debts.