What is Maker (MKR)?
MKR - the governance token of the Maker Protocol used to stabilise the DAI token.
MKR is used to pay transaction fees on the Maker system and it collateralizes the system. It stablizes DAI - a stablecoin created by Maker.
& Auction Mechanism
Maker has a total supply of 1 million MKR and uses the auction system of Maker Protocol to regulate its supply. When DAI is bought at surplus actions using MKR, Once the Surplus Auction has ended, the Maker Protocol autonomously destroys the MKR collected, thereby reducing the total MKR supply.
MKR is an ERC-20 token on the Ethereum blockchain and can not be mined. It’s instead created/destroyed in response to DAI price fluctuations in order to keep it hovering around $1 USD.
The MKR token—the governance token of the Maker Protocol—allows those who hold it to vote on changes to the Maker Protocol. MKR holders are incentivized to vote for the good of the entire system as the buyers of last resort for DAI stablecoin.