Token supply is never just a number. In decentralized finance, it is a story about incentives, credibility, and emergency design. Few protocols illustrate this better than Maker and its governance token’s evolution from MKR to SKY. What started as a deliberately scarce asset—capped at one million tokens to align long-term governance with system safety—was eventually forced to bend under real stress. The protocol’s survival required temporary dilution, and its recovery later demanded years of disciplined buybacks and burns.

SKY inherits that entire monetary philosophy, but expresses it through a new unit structure and a post-Endgame governance framework. Understanding SKY’s supply today therefore requires understanding MKR’s past: why the cap existed, how it was broken during crisis, how it was repaired through deflationary policy, and why the migration to SKY aimed to preserve scarcity while enabling new incentive layers.

This article traces that supply history from the original MKR hard cap, through Black Thursday’s emergency minting, the long burn era that followed, and finally the MKR→SKY conversion at 1:24,000. It then analyzes SKY’s current supply regime—stable since June after an early emission episode—and what its holder structure implies about long-term alignment versus short-term float. The goal is simple: to show that SKY’s supply is not a fresh beginning, but the continuation of Maker’s core economic DNA.

Maker launched MKR with an initial supply of 1,000,000 tokens—a deliberately scarce governance asset meant to align risk management with tokenholder incentives. MKR wasn’t intended to be a “utility token” with flexible emissions. Instead, it was a recapitalization backstop: if the system generated surplus, MKR would be bought and burned; if the system ran a deficit, MKR could be minted and auctioned to restore solvency.

This design created a strong reflexive loop: MKR holders benefited from careful governance because good risk policy led to protocol surplus and thus MKR burns.

That deflationary story was interrupted by the most dramatic stress test in Maker history: Black Thursday (March 12, 2020). ETH’s price collapsed so fast that Maker liquidations failed to raise enough DAI to cover vault debt. The protocol ended up with roughly $4–6.6M of unbacked DAI (“bad debt”).

Maker’s solution was exactly what MKR was designed for: a Debt Auction. New MKR was minted and sold for DAI to recapitalize the system. The retrospective and post-mortems report that a bit over 20,000 MKR were minted and auctioned, raising about 5.3M DAI and restoring system solvency.

So, the hard cap proved “soft in emergencies”: MKR supply could expand only when the protocol needed to pay off debt and protect DAI’s peg.

After 2020, Maker spent years in a long repair phase. As the protocol matured and revenue grew, surplus auctions/buybacks burned MKR, steadily offsetting the Black Thursday dilution. Mechanically, this is the mirror image of debt auctions: surplus DAI is used to buy MKR and burn it, reducing supply.

By the time the Endgame rebrand and migration path to SKY was approved, MKR’s total supply was just above 1.0M again—around 1,005,577 MKR per CoinGecko-indexed data.
(So effectively: emergency minting pushed MKR above 1M, and years of burns pulled it back toward the original cap.)

Endgame introduced SKY as the successor governance asset, with a fixed conversion rate:

1 MKR converts into 24,000 SKY.

This ratio is now the canonical bridge for governance migration.

The intent wasn’t just rebranding. The larger unit supply makes SKY more flexible for staking incentives, rewards distribution, and long-term ecosystem design, while preserving MKR holders’ proportional ownership through the fixed exchange rate.

At the moment of transition, Sky governance approved an initial expansion of SKY supply: 600 million SKY were emitted, but after roughly two months the emissions were stopped (as per your summary of the governance timeline).

This short-lived issuance set the stage for the current policy: supply stability first, emissions only if explicitly justified.

According to your Dune dashboard:

• Current SKY supply: 23,474,312,042 SKY

• This level has been stable since June.

• The June peak was 28,658,371,501 SKY, after which supply contracted and then stabilized.

Your charts also show that buybacks are happening but not yet burned, meaning they are not reducing supply today. This is consistent with Sky’s stated intention to begin systematic burns once the full “Star” architecture is deployed.

So the policy is:

1. Keep supply fixed in normal times.

2. Allow minting only in true emergencies (i.e., to cover protocol debt), mirroring MKR’s original backstop logic.

That keeps SKY explicitly aligned with Maker’s founding ethos: scarcity unless solvency is at risk.

Even with tens of billions of units, the stable supply narrative frames valuation cleanly. Using your current market cap estimate:

• Market cap ≈ $988,471,500

• i.e., still below $1B

So SKY is priced like a scarce governance claim on a large stablecoin engine despite its large nominal unit count.

A key part of the SKY supply story is who holds it and in what form. Your holder breakdown indicates that most SKY sits in buckets such as:

• Sky Lockstake Engine

• Sky Chief (delegated)

• Large long-term aligned clusters (e.g., MKR2SKY converters / governance infrastructure)

• Only a minority in liquid venues like CEXs.

That matters because delegated/locked balances typically reflect long-duration governance alignment, not short-term trading float. In other words, the effective circulating supply that can sell is likely much smaller than the headline total.

SKY inherits MKR’s entire monetary philosophy:

• MKR began as a 1M fixed-cap governance asset.

• It proved resilient through Black Thursday, when ~20k MKR were minted to erase protocol bad debt.

• Over subsequent years, surplus burns pulled supply back toward the cap.

• Endgame then migrated governance to SKY at 1:24,000, preserving ownership while changing unit economics.

• After a brief 600M SKY emission, supply policy reverted to stability.

• Today SKY supply is stable (~23.47B), with burns expected only after the Star rollout, and minting reserved for emergencies.

In short: SKY is MKR’s scarcity-first DNA expressed in a modern, higher-granularity token.