MakerDAO founder proposes strict deflationary tokenomics amid rebranding process

Rune Christensen, laminitis of Sky (formerly MakerDAO), has proposed a strictly deflationary attack to the protocol’s governance token arsenic the assemblage prepares to ballot connected whether to revert its marque oregon not connected Nov. 11.

Christensen explained that the projected changes would impact the governance token supply, whether it continues arsenic SKY oregon pivots backmost to MKR.

Deflationary tokenomics

If approved, the projected tokenomics would destruct token emissions nether regular conditions, transforming the token operation to beryllium strictly deflationary.

The burning mechanism, integral to Maker’s tokenomics, would permanently trim the full token proviso implicit time. An objection to this regularisation would beryllium lone successful cases of important fiscal shortfall, perchance jeopardizing Maker’s stablecoins — Sky Dollar (USDS) and DAI.

Under the proposal, the ecosystem would present “Star Token Rewards,” including Spark (SPK), which token holders could gain done governance information and activation of Maker’s Seal Engine, adding caller incentives for engagement portion adhering to the deflationary model.

Distinct scenarios ahead

The assemblage ballot volition besides determine whether to clasp the established Maker marque oregon afloat follow the Sky identity. If the Sky marque wins, MakerDAO plans to migrate the full MKR ecosystem into SKY, rebranding MKR tokens arsenic Wrapped 24k Sky Tokens (SKY24K).

This modulation aims to forestall disorder astir bequest MKR tokens and debar requiring holders to marque immoderate changes to their existing positions. The power would simplify integration, enabling MKR holders to entree Seal Engine features and governance without complications.

In the lawsuit that the Maker marque prevails, Sky would displacement into an auxiliary relation arsenic a “Star,” promoting adoption successful a mode complementary to Spark, which chiefly drives collateral and borrowing activity. Under this structure, Sky’s token would beryllium renamed OLD_SKY, convertible backmost to MKR astatine a fixed complaint of 1:24000, or, for a constricted time, exchanged 1:1 for tokens governing the Sky Star.

Dual-Star system

Christensen’s connection envisions Spark and Sky arsenic complementary “Stars” wrong Maker’s ecosystem, targeting some the proviso and request sides.

While Spark would absorption connected collateral allocation and borrowing incentives, Sky would ore connected gathering adoption done USDS utilization. Sky would besides power the Sky.money level and run with an Accessibility Reward system, providing incentives for projects that summation USDS adoption.

In its archetypal phases, Sky volition person exclusive entree to the Accessibility Reward system, portion Spark volition clasp exclusive rights to Maker’s Allocation System. This impermanent favoritism aims to streamline each Star’s absorption arsenic the ecosystem grows.

The last ballot connected this connection volition instrumentality spot from Nov. 11 to Nov. 14, with further details to beryllium released successful the coming days. MakerDAO is positioned to fortify its foundational structures, either with a renewed Maker marque oregon a streamlined Sky transition, fostering sustainable maturation done expanded USDS and a much engaged, incentivized community.

The station MakerDAO laminitis proposes strict deflationary tokenomics amid rebranding process appeared archetypal connected CryptoSlate.