Sky founder proposes: implementing a token deflation model, decision on whether to restore the MKR name will be made on the 14th.

The co-founder of DeFi protocol Sky, formerly known as MakerDAO, Rune, recently announced on Twitter that he is preparing to propose a community vote to introduce deflationary properties to Sky's token model. This proposal also involves a rebranding between Sky and MakerDAO. The vote is set to take place from November 11 to November 14, and token holders are urged to exercise their rights as Web 3 citizens at that time.

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The proposal of a deflationary token economic model will transform the core token, whether MKR or SKY emerges as the winner, into a strict deflationary token economy. If approved, there will be no token issuance under normal circumstances, and a mechanism for burning tokens will be introduced to reduce the supply. This means that the total supply will only decrease over time, with the only exception being in the event of collateral shortages leading to bankruptcy risks for USDS and DAI, as per the original MKR token economics.

In addition to strict deflation and token burning, the core tokens MKR or SKY can still be used to earn Star token rewards, such as Spark SPK. For governance participants using the Seal Engine, they will receive Star tokens and USDS rewards. Rune mentioned that this is a double benefit of deflation, along with additional rewards.

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SKY or MKR? Brand Positioning Will be Revealed After the 14th

The next proposal is to decide whether the core token should exist in the form of SKY or MKR, and the current token name has also been renamed to SKY after the protocol rebranding. Rune mentioned that having two core tokens in a protocol is confusing, and if the voting result favors keeping the Sky brand, the protocol will pivot and focus on transitioning the entire ecosystem's MKR to SKY. The Maker token MKR will be renamed to Wrapped 24k Sky token SKY24K.

If Maker wins: the current SKY token will be changed to OLD_SKY, and can be permanently exchanged back to MKR at a fixed 1:24000 ratio. For a limited time before and after the release of Sky Star, OLD_SKY can also be exchanged for the governance Sky Star token at a 1:1 ratio.