MakerDAO founder & CEO Rune Christensen has submitted a proposal regarding tokenomics to the Maker forum. The proposal has been titled “Sagittarius Engine.“
With his proposal Sagittarius Engine, Christensen urges the community to learn from the innovations in the decentralized finance (DeFi) sector so that Maker Protocol value flows can be better directed at long-term governance and to encourage the passive holder to start participating.
The proposal also highlighted the importance of “the most powerful forms of tokenomics that are working elsewhere in the ecosystem” and how they can impact the growth of MakerDao.
The MKRs And Voting Powers Revisited
By gathering the cash flow of the protocol into a capital pool called a Bucket, the Sagittarius engine offers to those holding long term MKR the opportunity to borrow Dai on very favorable terms from the Bucket using MKRs as collateral. Additionally, this Engine locks up and removes large amounts of MKR within a short period of time.
A lockup period of 1-4 years is required for access to this feature. By locking up MKR in this way, voting power of the locked MKR could rise by up to twofold. Furthermore, the CEO discussed issuance of MKRs and yield farming, which would provide direct benefits to MKR holders without constraining the availability of resources.
It will be a force of economic gravity for the entire Age of Sagittarius, providing guidance for the direction of the community and increasing governance stability.
“In total I propose that it will last over a period of 50 years, with an initial boost phase, followed by a ramp-up phase and a long tapering phase.”
To bring its total supply to 3 million, Christensen has proposed to issue a further 2 million MKR.
In Search Of Alternative Methods of MKRs Distribution
According to Christensen, Making Governance should also test alternative methods of distributing the new MKRs, such as offering MKRs as standard farming rewards for users who have specific flagship collateral vaults, such as ETH or ETH-LP tokens.
He further wants Maker Governance to experiment with different ways to distribute the new MKR while providing options like offering MKR as standard yield farming rewards for users who have specific flagship collateral vaults, such as ETH or ETH-LP tokens. A special “discounted option” to buy MKR pre-locked in Sagittarius at a steady rate should also be made available to flagship collateral vaults by Maker Governance.
Additionally, MKR can be sold directly to Dai using Dutch auctions, at a discount using “bonds“ or pre-locked in Sagittarius at a discount using Dutch auctions.
Christensen provided an option that reveals the “key to making the overall project a success and giving Maker the momentum it needs to grow to the next level.”
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