Sky (previously MakerDAO) founder and CEO, Rune Christensen, has proposed a strictly deflationary tokenomics strategy for the Maker token as the community prepares to vote on a rebranding decision. The proposal seeks to enhance MakerDAO’s governance token supply model and aligns with the community’s ambition to revert the protocol back to the original Maker brand.
The new deflationary approach would eliminate token emissions under normal circumstances, transforming the token’s structure and lowering overall emissions. Maker’s existing burning mechanism would help reduce the total token supply gradually. The exception to this rule would occur during a significant financial shortfall, which could potentially compromise the stablecoins, Sky Dollar (USDS) and DAI.
The updated proposal adds “Star Token Rewards” to the ecosystem, which include Spark (SPK) tokens. These tokens will enable eligible token holders to earn rewards by participating in governance and activating Maker’s Seal Engine. This feature will ensure continued growth in the token’s utility while maintaining a deflationary model.
A crucial community vote is set to take place from November 11 to 14, where the participants will decide whether the MKR ecosystem will continue as Sky or revert back to the original Maker brand. Sky, Maker, and its tokens has been at the crossroads with a potential rebranding pending since May 13, when the Maker Protocol switched from a centralized governance system to a Decentralized Autonomous Organization (DAO).
If the community votes to maintain the established Maker brand, the Sky team will have an auxiliary role as a “Star” in supporting adoption. Under this scenario, Maker’s existing MKR tokens will be renamed OLD_SKY and can be converted back to MKR at a fixed 1:24,000 rate or exchanged for Sky Star tokens 1:1.
On the other hand, if the community votes to revert to the original Maker brand, Sky will undergo a rebranding process, with MKR tokens being renamed as Wrapped 24k Sky Tokens (SKY24K). This transition aims to prevent any confusion or complications related to the different token names.
The dual-star system envisaged by the proposal foresees Spark and Sky as complementary figures within Maker’s ecosystem, targeting both the supply and demand sides. Spark will focus on collateral allocation and borrowing incentives, while Sky will concentrate on fostering wider adoption through Sky Dollar’s utilization. The system will be supported by an Accessibility Reward scheme, enticing collaboration with projects that aim to increase Sky Dollar’s adoption.
Multiple changes within the proposed tokenomics strategy will help MakerDAO consolidate its protocols and strengthen its foundational structure, ensuring long-term growth and sustainability through expanded token utilization and an incentivized community.