Summary

Canonical</strong:Phrase MakerDAO founder Rune Christensen is pushing forward with a rigorous deflationary approach in the wake of the self-identified Sky (previously MakerDAO) protocol’s storable governance token vote. The proposed alterations would impact the governance token supply of the Sky protocol, and the instance is slated to occur in the next four to six weeks.

Canonical</strong:Phrase

Deflationary tokenomics

The proposed changes aim to affect the governance token supply holder if a rebranding is implemented. If passed, the protocol”s deflationary tokenomics would eliminate the regular crypto-currency emission, transforming the token structure into an exclusively deflationary one. In this instance, the burning mechanism is said to permanently reduce the total token supply of the Sky protocol — regardless of the instance in which MKR tokens will become Wrapped 24k Sky Tokens (SKY24K). Christensen mentions, “the approach will only work if we actively burn down the supply by placing a cap on the maximum reserve ratio.” In addition, the protocol introduced an airdrop mechanism to reward MKR token holders for their past, present, and future participation in the protocol’s governance.

According to a recent interview with Rune Christensen, the creator says that although the true value of a deflationary tokenomics is still unknown, he is confident that the long-term viability of the protocol will be secured through the burning mechanism.

As of now, MKR token holders are unsure whether their MKR tokens will stay existing with the MakerDAO rebrand. Christensen admits that if the rebrand will happen, all MKR tokens will convert from MKR to SKY24K.

To conclude, the exact impact that the proposed changes will have on the MKR token distribution protocol remains to be seen.

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*Last updated on 8/10/2021 by Taylor** ***

<p>The post “MakerDAO Founder Proposes Strict Deflationary Tokenomics Amid Rebranding Vote” first appeared on CoinBuzzFeed.</p>