Rune Christensen, founding father of Sky (previously MakerDAO), has proposed a strictly deflationary method to the protocol’s governance token because the group prepares to vote on whether or not to revert its model or not on Nov. 11.
Christensen defined that the proposed modifications would have an effect on the governance token provide, whether or not it continues as SKY or pivots again to MKR.
Deflationary tokenomics
If authorised, the proposed tokenomics would eradicate token emissions underneath common situations, reworking the token construction to be strictly deflationary.
The burning mechanism, integral to Maker’s tokenomics, would completely scale back the overall token provide over time. An exception to this rule would exist solely in circumstances of great monetary shortfall, doubtlessly jeopardizing Maker’s stablecoins — Sky Greenback (USDS) and DAI.
Beneath the proposal, the ecosystem would introduce “Star Token Rewards,” together with Spark (SPK), which token holders may earn by way of governance participation and activation of Maker’s Seal Engine, including new incentives for engagement whereas adhering to the deflationary mannequin.
Distinct situations forward
The group vote may even determine whether or not to retain the established Maker model or totally undertake the Sky identification. If the Sky model wins, MakerDAO plans emigrate the complete MKR ecosystem into SKY, rebranding MKR tokens as Wrapped 24k Sky Tokens (SKY24K).
This transition goals to forestall confusion about legacy MKR tokens and keep away from requiring holders to make any modifications to their current positions. The swap would simplify integration, enabling MKR holders to entry Seal Engine options and governance with out problems.
Within the occasion that the Maker model prevails, Sky would shift into an auxiliary position as a “Star,” selling adoption in a approach complementary to Spark, which primarily drives collateral and borrowing exercise. Beneath this construction, Sky’s token could be renamed OLD_SKY, convertible again to MKR at a set fee of 1:24000, or, for a restricted time, exchanged 1:1 for tokens governing the Sky Star.
Twin-Star system
Christensen’s proposal envisions Spark and Sky as complementary “Stars” inside Maker’s ecosystem, focusing on each the availability and demand sides.
Whereas Spark would give attention to collateral allocation and borrowing incentives, Sky would focus on constructing adoption by way of USDS utilization. Sky would additionally management the Sky.cash platform and function with an Accessibility Reward system, offering incentives for initiatives that improve USDS adoption.
In its preliminary phases, Sky can have unique entry to the Accessibility Reward system, whereas Spark will maintain unique rights to Maker’s Allocation System. This non permanent distinction goals to streamline every Star’s focus because the ecosystem grows.
The ultimate vote on this proposal will happen from Nov. 11 to Nov. 14, with further particulars to be launched within the coming days. MakerDAO is positioned to strengthen its foundational buildings, both with a renewed Maker model or a streamlined Sky transition, fostering sustainable progress by way of expanded USDS and a extra engaged, incentivized group.
