Rune Christensen, founder of Sky (previously MakerDAO), has proposed a strictly deflationary approach to the protocol’s governance token as the community prepares to vote on whether to revert to its original brand or not on November 11th. According to Christensen, the suggested changes would impact the total governance token supply, whether it remains as SKY or returns to MSEK.
Deflationary Tokenomics
If the proposal is approved, the new tokenomics would abolish token emissions under regular conditions and convert the token structure to be strictly deflationary. According to the Burning mechanism, an essential component of Maker’s tokenomics, the total token supply will continually diminish. Uniform reductions would occur in only very exceptional circumstances, which risk jeopardizing Maker’s stablecoins – Sky Dollar (USDS) and DAI.
A new incentive program called “Star Token Rewards” would be introduced as part of the proposal, comprising Spark (SPK) tokens, which users could earn by participating in the governance process and activating Maker’s Seal Engine, providing additional incentives for participation while upholding the deflationary model.
Distinct Scenarios Ahead
The upcoming community vote will determine whether Maker should retain its existing brand or fully embrace the Sky identity. If Sky secures the majority support, MakerDAO will migrate the entire MKR ecosystem into SKY, rebrand MKR tokens as Wrapped 24k Sky Tokens (SKY24K). This move seeks to eliminate confusion around legacy MKR tokens and prevent any necessity for token holders to modify their existing holdings. This change aims to streamline integration processes, enabling MKR holders to refer to Maker’s Seal Engine features and governance membership without any obstacles.
However, if the Maker brand survives, Sky will transition into a “Star” role, functioning as additional support for the ecosystem. In this scenario, Sky’s token is renamed OLD_SKY, with holders having the option to exchange 1:1 for tokens regulating the Sky Star or (1:24000) MKR in the short term. The governing power of Spark, which primarily brings in new users, will not be affected.
The Dual-Star System
Christensen’s proposal envisions Spark and Sky as two complementary “Stars” within Maker’s ecosystem, each targeting different aspects. Spark is designed to focus on collateral allocation and borrowing incentives, while Sky prioritizes increasing adoption via USDS use. It will also oversee the Sky.money platform and manage an Accessibility Reward system, incentivizing projects that enhance USDS adoption. Accessibility Reward allocation will initially be routed to Sky exclusively, whereas Spark will be responsible for Maker’s Allocation System. They expect this temporary differentiation will ease implementation and clarify the usage of the two different Stars and their rewards this way.
Finally, the community vote for this proposal will transpire from November 11th until November 14th, with further details to be unveiled throughout these days. MakerDAO is ready to confront its future, either by rebranding its core or transitioning to a streamlined Sky model, fostering sustainable growth through increasing USDS and an active, incentivized community.