Sky, the decentralized finance (DeFi) lending protocol formerly known as MakerDAO, is moving to overhaul how its treasury allocates net revenue now that the founding phase of capital deployment has formally ended.
In a forum post, founder Rune Christensen laid out the rationale for simplifying the Treasury Management Function (TMF), arguing that the recent transfer of Genesis Capital to Grove marks Sky’s permanent exit from the Genesis Capitalization phase. Genesis Capital was the bootstrap funding mechanism Sky used to seed new agents during the expansion of its Sky Agent Network.
The “irregular, governance-determined capital deployments” of the founding period are over, the post said, leaving behind a set of expenses that are rules-bound, predictable, and capped as a fixed percentage of revenue.
The proposal would simplify the TMF from a five-step conditional waterfall into a four-step structure with fixed allocations across Security and Maintenance, Aggregate Backstop Capital, the Smart Burn Engine, and USDS Staking Rewards.
It would also retire several legacy mechanisms, including the Net Revenue Ratio, phase-based distinctions, activity-based staking reward tiers, and Short Term Trading provisions.
The treasury overhaul comes as Sky scales rapidly. USDS supply has climbed to roughly $11.6 billion, making it the third-largest stablecoin, after the Sky community authorized up to $2.5 billion for deployment through stablecoin incubator Obex earlier this year and launched native USDS on Avalanche via the SkyLink bridge in April.
S&P Global Ratings, which last year assigned Sky a “B-” issuer credit rating, has flagged governance and capital position as the protocol’s key constraints.
Tightening the rules around how revenue is split between security buffers, backstop capital, SKY buybacks, and staking rewards is consistent with the post-Endgame push to make Sky’s expense base more predictable.
This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.
