Sky opens vote to penalize stragglers delaying MKR-to-SKY token conversion

Sky, the DeFi protocol formerly known as MakerDAO, opened a governance vote to set a 1% “Delayed Upgrade Penalty” on MKR-to-SKY conversions, a strategy meant to push investors toward the new token and standardize ecosystem operations following last August’s rebrand.

The fee would start Sept. 22, if the measure passes. It would then rise by one percentage point every three months, but upgrades made before the deadline would not incur a fee, according to the proposal.

The penalty is part of Sky’s multi-phase “Endgame” overhaul that retires MKR in favor of SKY and completes last spring’s move to make SKY the protocol’s sole governance token. Sky said the vote is designed to accelerate the tail end of the transition and reduce complexity around running parallel governance tokens. The protocol rebrand and token switch are meant to simplify governance for new users and exchanges.

An earlier proposal moved voting power to SKY and set the final steps to sunset MKR from governance. May’s pitch was tabled to advance the MKR-to-SKY conversion, disable “downgrades” back to MKR, and consolidate governance under SKY, steps the project argued would improve clarity for exchanges and new users while aligning the brand with its token.

The latest vote went live late Thursday on Sky’s governance portal . Holders can review the bundle and cast ballots.

Investors and users have rushed to adopt the new token following both governance votes. Sky’s dashboard shows that about 81% of MKR have already upgraded to SKY.  However, there’s still about 176,070 MKR worth over $316 million yet to be swapped for SKY. The conversion rate remains 1 MKR = 24,000 SKY, while sky also offers a 1:1 path from its DAI stablecoin to USDS.