OASIcs.Tokenomics.2021.11.pdf
- Filesize: 482 kB
- 5 pages
Document
Fundamentals of the MakerDAO Governance Token
Authors
-
Part of:
Volume:
3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021)
Series: Open Access Series in Informatics (OASIcs)
Conference: International Conference on Blockchain Economics, Security and Protocols (Tokenomics) - License:
Creative Commons Attribution 4.0 International license
- Publication Date: 2022-03-18
Cite AsGet BibTex
Roman Kozhan and Ganesh Viswanath-Natraj. Fundamentals of the MakerDAO Governance Token. In 3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021). Open Access Series in Informatics (OASIcs), Volume 97, pp. 11:1-11:5, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2022)
https://doi.org/10.4230/OASIcs.Tokenomics.2021.11
https://doi.org/10.4230/OASIcs.Tokenomics.2021.11
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.
Subject Classification
ACM Subject Classification
- Applied computing
Keywords
- Cryptocurrency
- monetary policy
- stablecoins
- governance token
Metrics
- Access Statistics
-
Total Accesses (updated on a weekly basis)
0PDF Downloads
References
-
Adrien d'Avernas, Thomas Bourany, and Quentin Vandeweyer. Are stablecoins stable? Working Paper, 2021.
-
Barry Eichengreen. From commodity to fiat and now to crypto: What does history tell us? Technical report, National Bureau of Economic Research, 2019.
-
Klaudia Jarno and Hanna Kołodziejczyk. Does the design of stablecoins impact their volatility? Journal of Risk and Financial Management, 14(2):42, 2021.
- Ariah Klages-Mundt and Andreea Minca. While stability lasts: A stochastic model of stablecoins. arXiv preprint, 2020. URL: http://arxiv.org/abs/2004.01304.
-
Roman Kozhan and Ganesh Viswanath-Natraj. Decentralized stablecoins and collateral risk. WBS Finance Group Research Paper Forthcoming, 2021.
-
Ye Li and Simon Mayer. Money creation in decentralized finance: A dynamic model of stablecoin and crypto shadow banking. CESifo Working Paper, 2021.
-
Kanis Saengchote. Where do defi stablecoins go? a closer look at what defi composability really means. A closer look at what DeFi composability really means.(July 26, 2021), 2021.