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Fundamentals of the MakerDAO governance token
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Kozhan, Roman and Viswanath-Natraj, Ganesh (2022) Fundamentals of the MakerDAO governance token. In: 3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021), Virtual conference, 18–19 Nov 2021. Published in: 3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021), 97 11:1-11:5. ISBN 9783959772204. doi:10.4230/OASIcs.Tokenomics.2021.11 ISSN 2190-6807.
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Official URL: https://drops.dagstuhl.de/opus/volltexte/2022/1590...
Abstract
We study the fundamentals governing the price of the MakerDAO governance token MKR. Governance tokens are minted in response to liquidations, and burned in response to growth in the system surplus. MKR tokens appreciate with an increase in system surplus and depreciate with a rise in systemic risk due to DAI liquidation spirals. We discuss incentive compatibility conditions that need to be satisfied for the protocol to maintain the DAI stablecoin peg.
Item Type: | Conference Item (Paper) | ||||
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Subjects: | H Social Sciences > HG Finance | ||||
Divisions: | Faculty of Social Sciences > Warwick Business School | ||||
Library of Congress Subject Headings (LCSH): | Cryptocurrencies, Digital currency, Cryptocurrencies -- Government policy, Money -- Technological innovations, Bitcoin | ||||
Series Name: | Open Access Series in Informatics (OASIcs) | ||||
Journal or Publication Title: | 3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021) | ||||
Publisher: | Schloss Dagstuhl — Leibniz-Zentrum für Informatik | ||||
Place of Publication: | Dagstuhl, Germany | ||||
ISBN: | 9783959772204 | ||||
ISSN: | 2190-6807 | ||||
Official Date: | 18 March 2022 | ||||
Dates: |
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Volume: | 97 | ||||
Page Range: | 11:1-11:5 | ||||
DOI: | 10.4230/OASIcs.Tokenomics.2021.11 | ||||
Status: | Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Date of first compliant deposit: | 5 May 2022 | ||||
Date of first compliant Open Access: | 5 May 2022 | ||||
Conference Paper Type: | Paper | ||||
Title of Event: | 3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021) | ||||
Type of Event: | Conference | ||||
Location of Event: | Virtual conference | ||||
Date(s) of Event: | 18–19 Nov 2021 |
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