The interest on loans paid by CDP creators in DAI and liquidation penalties are used to buy MKR from the market and burnt. This is like a company doing a share buyback instead of paying a dividend directly.
It would be pretty amazing indeed. There are many countries in the world where the credit rate is very high due to unstable economy and high inflation. Having access to cheap credit from the MakerDao platform can be a game changer for many people's lives.
Superficially, yes. But economicaly, a credit union has the opposite function.
Credit unions relend the money, *increasing* the money supply. MakerDAO are locking up the DAI so nobody can use it, *reducing* the (DAI) money supply.
MKR holders are paid indirectly by a continuous reduction of MKR supply due to fee burns.
additionally, under mc-DAI, MKR holders will profit from CDP liquidation penalties levied by the system.
also, under mc-DAI, DAI holders are to receive interest for locking up DAI for a set period.
more details here: https://medium.com/makerdao/dai-reward-rate-earn-a-reward-from-holding-dai-10a07f52f3cf
laugrig5 - 6 years account age. 300 - 600 comment karma.6 months ago
MakerDAO are onto something big. Met some of the team at EthBerlin. Very promising project which will help the whole Ethereum ecosystem immensely in terms of addressing volatility and adoption.