MakerDAO community members defined a blueprint for a proposal to replace its governance token ‘Maker’ with ‘stkMaker’.
The proposal was prepared on the MakerDAO forum by community leader monet-supply. The proposal came with a brief understanding through formula, flow charts, and others. If the proposal passes with majority votes, then the DAO will get a new governance token ‘stkMaker’.
However, the proposal still needs to pass through the Maker Improvement Proposal (MIP) stage for a formal vote by MKR holders. This process will take around two takes after starting.
Since its proposal outline was posted on the website, it is getting positive responses from the community and appreciation for its technical benefits.
“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.”
The staking proposal pointed out some loopholes and inefficiencies associated with the ongoing tokenmics model that runs on the “buyback and burn” mechanism. It suggests that the current mechanism has drawbacks such as lack of targeted incentives since buyback and burn returns all capital to MKR holders.
The proposal creators claim that there is a “weak crypto narrative” and MKR issuance could enhance the protocol’s operations. Also, the current system contains a lack of security against governance attacks or voting manipulation.
Monet supply believes that the new system will definitely provide greater incentives to stake.
MakerDAO is a decentralized platform where users can put their crypto assets as collateral and borrow DAI tokens. This token is then used on the other decentralized platforms and protocols. Once users repay their loan, this DAI token gets burned.
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