Sky, formerly MakerDAO, proposes treasury overhaul to shift from governance-led capital deployment to fixed, rules-based spending model, simplifying allocations across security, buybacks and staking rewards

Sky, the DeFi protocol formerly known as MakerDAO, has proposed a major overhaul of how its treasury distributes net revenue, moving from governance-led, discretionary capital deployment to a fixed, rules-based framework. The change follows the formal end of Sky’s “Genesis Capitalization” bootstrap phase and the transfer of Genesis Capital to Grove, an institutional credit allocator in the Sky Agent Network. Under the proposal, Sky’s Treasury Management Function (TMF) would be simplified from a five-step conditional waterfall into a four-step model with fixed percentage allocations across: Security and Maintenance, Aggregate Backstop Capital, the Smart Burn Engine (SKY buybacks), and USDS staking rewards. The intermediate “Fortification Conserver” step would be removed, with its role folded into the remaining categories, and several legacy mechanisms would be retired, including the Net Revenue Ratio, Genesis vs. post‑Genesis distinctions, activity-based staking reward tiers, and short-term trading provisions. According to the proposal, governance would no longer make irregular, ad hoc capital deployment decisions; instead, expenses and distributions would be capped as a predictable share of net protocol revenue. This restructuring is positioned as a shift from a governance-driven, launch-phase funding model toward a steady-state, rules-bound treasury system, intended to make Sky’s costs and capital buffers more transparent and easier to manage as the protocol scales. It comes amid rapid growth of Sky’s USDS stablecoin, whose supply is cited at around $11.6 billion, making it the third-largest stablecoin, and after the community authorized up to $2.5 billion in deployments via the Obex stablecoin incubator and launched native USDS on Avalanche via SkyLink. Ratings agency S&P Global previously flagged governance and capital position as constraints on Sky, and the tighter, formulaic allocation of revenue between security buffers, backstop capital, SKY buybacks and staking rewards aligns with efforts to improve predictability and risk management as the protocol exits its founding era.

✨ AI-generated background, compiled from web sources — not editorial content.

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