1 min readFeb 14, 2018
Thanks for the question Alexander. When a CDP is liquidated there are two simultaneous auctions for Dai, and then one subsequent auction for MKR. The first two auctions are (1) the debt auction — this sells off MKR for Dai until the debt of the CDP is offset, (2) the collateral auction — this sells off the collateral in the CDP for Dai, and this Dai is then sent to auction (3) which is the MKR re-purchase — this auction sells off Dai for MKR and then burns the MKR to offset the initial dilution. There should really not be a scenario where *nobody* wants to buy the MKR as it will be auctioned off in infinity until the debt of the CDP is raised.