- Christensen unveils a burn-only technique for reducing token supply.
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The upcoming governance vote will determine the future of the core token.
Rune Christensen, co-founder of Sky (previously MakerDAO), has created a proposal for a strictly deflationary model. This proposal seeks to limit token emissions under normal circumstances, regardless of whether the basic token remains MKR or converts to SKY. Christensen hopes to improve stability and lower inflation by focusing on long-term supply reduction and developing a systematic burn process.
Proposed Deflationary Tokenomics
If the community supports the new model, token emissions will be eliminated under normal circumstances, resulting in a strictly deflationary framework. This solution includes a burning mechanism that steadily reduces the overall token supply over time. However, if catastrophic financial shortfalls threaten Maker’s stablecoins Sky Dollar (USDS) and DAI, they will allow an exclusion to permit temporary emissions.
To boost token value and stimulate community interaction, Christensen intends to implement a reward mechanism. Regardless of the core token categorization, holders would get Star Token Rewards, such as Spark SPK, via a new activation mechanism. Additionally, governance participants who use the Seal Engine will be eligible for more significant benefits, such as Star Tokens and USDS benefits.
A governance vote is set between November 11 and 14, during which stakeholders will decide whether MKR or SKY will serve as the main token. This vote comes after community debates about maybe returning to the original Maker moniker following mixed reactions to the August rebranding to Sky.
Christensen seems that this approach will provide clarity and allow the ecosystem to focus on growth and stability while confirming the protocol’s commitment to a sustainable future.
The community vote will also decide whether to completely adopt the Sky branding or keep the existing Maker brand. If the Sky brand wins out, MakerDAO intends to rebrand the MKR ecosystem as SKY and rename MKR tokens as Wrapped 24k Sky Tokens (SKY24K). This would ensure a smooth transition for MKR holders to new governance features.
As the final vote approaches, the Maker community is at a crossroads, ready to enhance its foundation with either a refreshed brand or a deliberate move to Sky, eventually driving long-term growth and more involvement in the ecosystem.
