MakerDAO community decides to continue Sky rebrand amid centralization concerns in vote MakerDAO community decides to continue Sky rebrand amid centralization concerns in vote
Polling data reveals four entities control 80% of the vote share, exposing decentralization vulnerabilities.
2 min read
Updated: Nov. 8, 2024 at 5:34 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The DeFi project Sky has retained its new brand identity rather than revert to MakerDAO following a community vote.
Polling data revealed that 79.3% of votes supported maintaining the Sky brand as the core protocol name. In contrast, about 18.46% backed a “limited brand refresh” under MakerDAO, while a mere 2.2% preferred a full reversion to the MakerDAO branding.
According to a Nov. 7 statement, the decision signifies a clear path forward for the Sky ecosystem, which has been positioned as the protocol’s primary brand. Essentially, the vote supports the transition from MKR to SKY and designates Sky as the identity for both its frontend app and backend protocol.
Sky co-founder Rune Christensen expressed enthusiasm about moving forward with the new brand, noting that:
“Sky stays as the brand for the backend protocol powering USDS – the stablecoin with access to native token rewards and savings rate.”
Centralization concerns
While the vote to retain the Sky brand gained broad support, concerns over centralized voting influence surfaced within the community.
The polling data showed that only around 20 participants cast votes, with four large entities controlling about 80% of the vote share. Each of these entities held roughly 20% voting power, and just one voted against the rebrand decision, leaving smaller participants with limited sway over the outcome.
Venture capitalist Mike Dudas raised concerns about these dynamics, pointing out that concentrated voting power among a few entities exposes DAOs to centralization issues. He noted that “five large entities accounted for 80% of the MakerDAO vote,” suggesting that DAOs may struggle to uphold fair governance under such conditions.
The centralization dilemma has become a recurring issue for DAOs. A research paper published in 2023 outlined how low voter participation can concentrate control in the hands of large token holders or “whales,” undermining DAOs’ decentralized goals.
Without high levels of voter engagement, the risk of centralized control grows, as smaller stakeholders often hold minimal influence over major decisions.
Looking ahead
With the Sky brand reaffirmed, Christensen detailed several upcoming goals for the ecosystem. Key priorities include expanding the adoption of USDS by launching Solana and Ethereum Layer 2 solutions.
Moreover, plans are underway to migrate MKR to SKY across centralized exchanges and update listings on platforms like CoinGecko. Additionally, Sky is preparing to launch Spark, its first major project under the new brand, offering SPK token rewards for USDS holders.
Christensen also shared that a proposal draft is being worked on to make SKY a deflationary token and to define tokenomics for Spark. These steps align with Sky’s vision of long-term sustainability and robust community engagement.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Maker is a decentralized autonomous organization on the Ethereum blockchain seeking to minimize the price volatility of its own stable token — the Dai — against the IMF’s international currency basket SDR.
Ethereum
$3,135.23
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Solana
$241.868
Solana is a high-performance blockchain platform that utilizes a unique consensus algorithm called “Proof of History” to achieve fast transaction speeds and low fees.
Maker is a Decentralized Autonomous Organization that creates and insures the dai stablecoin on the Ethereum blockchain.
Rune Christensen is Chief Executive Officer and Cofounder of MakerDAO.