Rune Christensen, co-founder of Sky Protocol (formerly MakerDAO), has presented an innovative proposal that seeks to establish deflationary tokenomics for its native token.
This proposal, which was put forward by Christensen via X, seeks to ensure the sustainable growth of the decentralized protocol. According to its co-founder, the implementation of deflationary tokenomics could strengthen the fundamental structures of the protocol, either under the Maker brand or with a complete transition to Sky Protocol.
As reported by this outlet, MakerDAO announced a rebranding of its protocol at the end of August, adopting the name Sky amid a series of updates and implementations with which it seeks to build a new generation of services in the DeFi ecosystem. However, the change was not well received by all members of the Maker community, with many disagreeing on the usefulness of switching to a new token, in this case SKY.
Due to this situation, earlier last week, Christensen revealed that the protocol governance would discuss a proposal to keep the name Maker and the MRK token, or change it to Sky Protocol and SKY, respectively.
Now, in his new publication, Christensen seeks to provide greater clarity and detail about his proposal.
SKY's deflationary tokenomics
Christensen’s tokenomics proposal relies on eliminating token emissions under normal conditions, such that the total supply of SKY or MKR only decreases over time. Christensen proposed a token burning engine that will permanently remove SKY tokens from circulation, thus ensuring his goal of a deflationary token.
However, their proposal includes an exception, which will apply in the event of a collateral shortage that threatens the stability of the protocol's stablecoins, such as Sky Dollar (USDS) and DAI.
Christensen also explained that, in addition to this deflationary structure, his proposal includes the introduction of “Star Token Rewards,” a program that will allow token holders to earn additional rewards through their participation in governance and the activation of the protocol’s Seal Engine. With this, Christensen seeks to both reinforce the token’s deflationary model and encourage greater community participation in it.
Key vote: Sky or Maker?
The protocol community will vote on whether to keep the Maker name or fully adopt the Sky identity. According to Christensen, if the decision is made to adopt the Sky name, the protocol will migrate all MKR tokens to SKY, renaming the MKR tokens as Wrapped 24k Sky Tokens (SKY24K), a transition designed to avoid confusion among MKR holders and ensure they do not have to take additional action to maintain their positions in the protocol.
On the other hand, should the old Maker name be retained, the SKY token will become a “Star” within the ecosystem, complementing Spark, another token that focuses on attracting borrowers and managing collateral. According to Christensen, in this scenario, the SKY token will be renamed OLD_SKY and can be converted back to MKR at a fixed rate of 1:24000.
The synergy between Spark and Sky in the MakerDAO ecosystem
Christensen’s proposal envisions an ecosystem in which Spark and Sky act as complementary “stars.” While Spark will focus on collateral allocation and incentivizing borrowing, Sky will focus on fostering adoption of the USDS stablecoin. Sky will also control the Sky.money platform, which will generate revenue through an accessibility rewards system, incentivizing projects that increase USDS adoption.
Initially, Sky will have exclusive access to the accessibility rewards system, while Spark will control the allocation system. This temporary distinction seeks to optimize the approach of each “star” as the ecosystem expands.
Christensen emphasized that all the changes outlined seek to build a deflationary tokenomics for the protocol and that his proposal seeks to clarify the doubts of the crypto community. However, on the social network, many commented about how complex it may be for the average user to migrate MKY and adopt the SKY24K token if the decision is made to permanently change the name of MakerDAO to Sky Protocol. In relation to this, an X user expressed his doubts about the fate of his MKR tokens if the protocol adopts the Sky rebranding.
Finally, the vote on this proposal will take place from November 11 to 14, allowing the protocol community to decide on its future and its tokenomics. Christensen has expressed that regardless of the outcome of the vote, the tokenomics proposal will provide clarity and a compelling opportunity for the growth and development of this ecosystem, considered one of the most innovative in the decentralized finance space.
At the close of this edition, the MKR price is $1.230, reflecting a 13% increase in the last week.
IMPORTANT: The content of this article is for informational purposes only and, in no case, what is written here should be taken as investment advice or recommendations. Bit2Me News reminds you that before making any investment you should educate yourself and know where you invest your money, as well as the pros and cons of the system. We separate ourselves from the actions and consequences that ignorance may entail. If you decide to invest in this or another asset class, you are solely responsible for the consequences that your decisions and actions may have.
