MKR holders to face penalties from September 22 - Here’s what you need to know

MakerDAO governance token holders brace for impact as new penalty framework takes effect September 22—just three days from now.

The Countdown Begins

MKR stakeholders face direct financial consequences for non-compliance with updated protocol requirements. The move signals MakerDAO's aggressive push toward stricter governance enforcement.

No grace period, no exceptions—just cold, hard code execution. Penalties automatically trigger through smart contract mechanisms that even traditional finance regulators would envy for their efficiency.

Because nothing says 'decentralized governance' like automated financial penalties—the blockchain equivalent of a parking ticket from an unstoppable robot cop.

Sky Protocol still has no strict deadline on swapping MKR 

Sky Protocol did not have a hard deadline on swapping MKR tokens, and the legacy asset continues to transact and trade for years after the rebranding. Around 82% of MKR has been converted to SKY, but around 176,088 MKR tokens remain. MKR still trades at $1,808.37, with $3.34M in daily volumes. 

Previously, MKR was key in the creation of DAI tokens, but was replaced by other collaterals and minting mechanisms. Around $318M is locked in the old version of the token. 

SKY traded at $0.0775, NEAR the middle of its range for the past year. Sky Protocol is among the apps to benefit from a return to DeFi, though the project lost its leading position as the biggest stablecoin producer. 

Sky Protocol still managed to survive a prolonged bear market and remain relatively unscathed from the bankruptcies of other protocols.

Recently, swaps of MKR accelerated, as the new platform expanded its activity. However, some traders have also swapped back into MKR in April, to make use of the token’s remnant price action. 

Swaps from MKR to SKY accelerated, as some protocols upgraded their holdings. MKR owners still hold over 170K MKR, potentially incurring over $3M in late swap penalties. | Source: Dune Analytics

A part of the swap delays may be due to the MKR/SKY discount or premium, based on the difference of the implied or actual price of SKY. 

Sky Protocol will gain from MKR penalties

Ahead of the penalty deadline, Binance already discontinued the MKR ticker after its delisting on September 15. Binance will automatically swap out all MKR into SKY before relisting the only remaining ticker. 

A rough estimate suggests around 170K MKR will not be swapped out on time. Some of the MKR sitting in centralized protocols was also swapped out automatically. Any remaining MKR may pay at least 3M in late fees to Sky Protocol. 

The recent swaps ended the Maker era, encouraging the usage of SKY for staking and other rewards. The Sky ecosystem is now more conservative, with a 4.75% savings rate, down from a peak of over 12%. 

The protocol also fully rebranded DAI to USDS, retaining the supply of 5.6B tokens. Currently, the Sky ecosystem carries over $17B in total value locked, aiming for more sustainable yield. Sky Protocol carries multiple collaterals from other DeFi projects, aiming for a minimal percentage of capital at risk. 

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