TLDR
- Sky opens governance vote to set a 1% penalty on MKR-to-SKY swaps beginning September 22.
- The penalty will rise by one percentage point every three months after the initial start date.
- Around 176,000 MKR worth over $316 million remain unconverted despite 81% already swapped to SKY.
- Binance delisted MKR and will auto-convert holdings to SKY to support Sky’s single-token governance.
Sky Protocol, formerly known as MakerDAO, has opened a governance vote to accelerate its transition to a single governance token. The proposal introduces a 1% “Delayed Upgrade Penalty” on MKR-to-SKY conversions starting September 22, rising by one percentage point every three months. Conversions completed before the deadline remain free from charges.
This measure is a key part of Sky Protocol’s multi-phase Endgame plan to retire MKR and make SKY the exclusive governance token. The plan aims to simplify governance, strengthen brand identity, and reduce the complexity of managing parallel token systems.
Sky Governance Vote Targets Final MKR Holders
The proposal went live on Sky’s governance portal Thursday, allowing token holders to review and vote on the changes. If passed, the penalty will push remaining MKR holders to complete conversions promptly.
Sky data shows that about 81% of MKR tokens have already been swapped for SKY. Still, roughly 176,000 MKR worth over $316 million remain unconverted. The MKR-to-SKY conversion rate stands at 1 MKR for 24,000 SKY, while a separate 1:1 path from DAI to USDS is also active.
Earlier proposals already shifted voting power to SKY and removed the option to revert back to MKR. The current vote serves as the final phase, designed to eliminate governance overlap and streamline Sky’s operations.
Conversions Accelerate Ahead of September 22
Furthermore, The looming penalty has sparked a notable uptick in conversion activity. MKR holders and decentralized protocols are moving quickly to avoid the initial 1% fee and the quarterly increases that follow.
Centralized exchanges have also acted. Binance delisted MKR on September 15 and will automatically convert any remaining MKR to SKY before reintroducing SKY as the sole ticker. Estimates suggest late conversions could result in at least $3 million in fees if large holders delay action beyond the deadline.
Some traders briefly hesitated earlier this year due to price differences between MKR and SKY. Even so, most participants are now choosing to finalize swaps to sidestep rising costs.
Sky Seeks Long-Term Ecosystem Stability
In addition, Sky Protocol continues to evolve beyond the MKR era. The protocol rebranded its DAI stablecoin to USDS and maintains more than $17 billion in total value locked. Its savings rate currently stands at a conservative 4.75%, down from highs above 12%, to encourage sustainable growth.
MKR’s governance role has steadily diminished as Sky introduced alternative collateral and minting mechanisms. With most of the supply already upgraded, the penalty plan is designed as a final push to complete the shift toward a single-token governance model.
Sky also aims to keep the network attractive for new users and exchanges by simplifying token management. Even so, it has avoided setting a strict end date for conversions, allowing MKR to continue trading and transacting for now.
SKY Maintains Market Stability
At the same time, SKY traded around $0.0775 recently, staying near the middle of its one-year range despite broader market fluctuations. This steady performance supports investor confidence as the conversion process nears completion.
The protocol expects further growth as staking and ecosystem incentives fully transition to SKY. By unifying governance under a single token and reducing operational complexity, Sky Protocol positions itself for continued relevance in decentralized finance while phasing out MKR.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
