The DeFi challenge Sky has retained its new model id somewhat than revert to MakerDAO following a neighborhood vote.
Polling information revealed that 79.3% of votes supported sustaining the Sky model because the core protocol identify. In distinction, about 18.46% backed a “restricted model refresh” below MakerDAO, whereas a mere 2.2% most well-liked a full reversion to the MakerDAO branding.
In response to a Nov. 7 assertion, the choice signifies a transparent path ahead for the Sky ecosystem, which has been positioned because the protocol’s major model. Primarily, the vote helps the transition from MKR to SKY and designates Sky because the id for each its frontend app and backend protocol.
Sky co-founder Rune Christensen expressed enthusiasm about shifting ahead with the brand new model, noting that:
“Sky stays because the model for the backend protocol powering USDS – the stablecoin with entry to native token rewards and financial savings price.”
Centralization issues
Whereas the vote to retain the Sky model gained broad help, issues over centralized voting affect surfaced throughout the neighborhood.
The polling information confirmed that solely round 20 members forged votes, with 4 massive entities controlling about 80% of the vote share. Every of those entities held roughly 20% voting energy, and only one voted towards the rebrand choice, leaving smaller members with restricted sway over the end result.
Enterprise capitalist Mike Dudas raised issues about these dynamics, mentioning that concentrated voting energy amongst a couple of entities exposes DAOs to centralization points. He famous that “5 massive entities accounted for 80% of the MakerDAO vote,” suggesting that DAOs could wrestle to uphold truthful governance below such circumstances.
The centralization dilemma has develop into a recurring problem for DAOs. A analysis paper revealed in 2023 outlined how low voter participation can focus management within the palms of enormous token holders or “whales,” undermining DAOs’ decentralized targets.
With out excessive ranges of voter engagement, the danger of centralized management grows, as smaller stakeholders typically maintain minimal affect over main choices.
Wanting forward
With the Sky model reaffirmed, Christensen detailed a number of upcoming targets for the ecosystem. Key priorities embody increasing the adoption of USDS by launching Solana and Ethereum Layer 2 options.
Furthermore, plans are underway emigrate MKR to SKY throughout centralized exchanges and replace listings on platforms like CoinGecko. Moreover, Sky is getting ready to launch Spark, its first main challenge below the brand new model, providing SPK token rewards for USDS holders.
Christensen additionally shared {that a} proposal draft is being labored on to make SKY a deflationary token and to outline tokenomics for Spark. These steps align with Sky’s imaginative and prescient of long-term sustainability and strong neighborhood engagement.
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