MakerDAO community leader monet-supply made a proposal to the MakerDAO forum on March 14, outlining an alternative token economic mechanism. The proposal proposes to create a new token, stkMKR, to replace MKR as the governance token.
If the proposal passes, it will bring about a shift in MakerDAO tokenomics.
The community was eruptive immediately after the proposal was presented. Many responses were received and many were in support.
After the development, the proposal must be passed as a MIP, or Maker Improvement Proposal, for it to go before the MKR holders. This process takes around two weeks.
What is the proposal trying to address?
The proposal seeks to address several issues affecting the current MakerDAO tokenomics that use the “buyback and burn” mechanism. Monet-supply indicated that the proposal would address issues like the lack of targeted incentive since all capital is returned by the buyback and/or burn mechanism to the MKR holder.
Monet claims that the current system is not effective in preventing governance attacks, especially when it involves voting manipulation.
⚒️ @MonetSupplyA token economic mechanism could be presented that would supplement the MKR buyback valuation accrual system.
stkMKR? The entire thread is available here:https://t.co/1hEORZTblu
— Maker (@MakerDAO) March 14, 2022
The solution proposed
The’monet supply’ proposal proposes an overhaul of the Tockenomics mechanism and the introduction of a new token, stkMKR, to replace MKR as the MakerDAO’s governance token.
The proposal states that the stkMKR token will act as a bonding token or staking token. It will be issued only to MKR holders for governance purposes.
The proposal includes the following:
“stkMKR will be non-transferable and represents MKR staked in governance. Staked tokenholders will receive a share of MKR tokens purchased through surplus auctions, so stkMKR will be backed by an increasing amount of MKR over time.”