Sky approved a governance proposal that removed a 5% exit fee on MKR, raised loan-to-value ratios, expanded borrowing against MKR collateral, and increased borrowing rates

Description

Sky, formerly known as MakerDAO, has implemented an emergency governance proposal that eliminates the 5% exit fee on MKR withdrawals, increases loan-to-value ratios, expands borrowing against MKR collateral, and raises borrowing rates. These changes aim to enhance protocol security and efficiency.

Event date

Feb 20, 2025 - 12:00am

Quotes that support claims

The proposal eliminates the longstanding 5% exit fee on MKR withdrawals, significantly expands borrowing against MKR collateral and raises borrowing rates — while simultaneously lowering liquidation thresholds.

The debate kicked off when GFX Labs’ PaperImperium — a long-time Maker community member and regular critic of the project’s recent direction — took to X to raise concerns over a fast-tracked governance proposal which relaxes restrictions on borrowing against the MKR governance token. The changes which, according to the thread, ”bypassed due process” would have the effect of “>2x the credit line for MKR holders, and raise the LTV from 50% to 80%”.

Tags

Week 07 of 2025

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Crypto news