A post to the MakerDAO Forum claims that the financial services protocol might replace MKR as its governance token with a new token, stkMKR. The proposal was introduced to address the criticism around MKR’s tokenomics.
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MKR’s new tokenomics may enhance existing incentives and benefits. The proposal emphasized that stkMKR will preserve MKR’s current burn mechanism and will allow users to claim their reinvest dividends and other payouts without spending funds on gas while keeping its tax efficiency.
As with previous tradeoffs. stkMKR will try to draw more attention to MakerDAO and MakerDAO via strengthening its story. It could have an impact on the price of its governance token, by increasing its users and updating its core components. This proposal asserts:
MakerDAO’s core governance token MKR will be replaced by a new token, the stkMKR. The MKR staked on governance will represent stkMKR and it is non-transferable. Stocked tokenholders will get a portion of MKR tokens bought through surplus auctions. Consequently, stkMKR’s backing will increase over time with an increasing amount MKR (automatically compounding as xSUSHI).
The proposal also claims that the MakerDAO would be more resistant to malicious and bad actors, and will provide investors with better incentives. Currently, the protocol provides rewards to users via buybacks and burn returns, but the new proposal will try to create more incentives for those users “providing excess value”.
The post asserts that stkMKR, its mechanism, and Cosmos’ governance model were inspirit by tokenomics around tokens such as stkAAVE or xSUSHI. This was added to the proposal:
To withdraw from stkMKR, you must wait for a pre-set period of unbonding. This improves governance security and protocol resilience (similar to Cosmos or stkAAVE).
In addition, the proposal contemplates a portion of MKR in the protocol would be diverted from the burning mechanism directly into stkMKR holders, and combine with another pool that would “smooth out yield volatility” and support Maker in difficult times, as seen below.
MakerDAO and The New Tokenomics
Many protocols are trying to improve and update their governance models and tokenomics. DeFi has experienced a significant increase in the number of competitive markets. Veteran protocols such as Maker are essential to keep up with the competition, including Terra, Terra, Avalanche and Cosmos.
This proposal aims to encourage users to take part in the new governance model through improved staking rewards, delegation rates and other incentives. Also, the proposal seeks to increase the MKR’s value with “concrete APR figures and supply restriction” and increase protection against volatile periods in the market while preventing credit losses.
If the proposal is approved, it will modify the MakerDAO governance structure in the following areas: Migration. This includes voting, contract delegation, conditional delegation, and disaster relief. Proposal claims:
This will decrease the buyback yield due to all MKR and provide a new source of yield for staked MKR. This will increase the stkMKR’s effective yield, at the cost of untaked MKR.
The Maker community currently discusses the idea and, if received positive feedback, will vote moreformally.
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MKR currently trades at $182 and has a daily chart showing a 2.3% profit.
