MakerDAO has deployed $MKR Smart Burn Engine contracts on chain.
The Smart Burn Engine is a smart contract system designed to allocate excess $DAI from the Surplus buffer that Maker is not using as a contingency reserve. The main difference between the Smart Burn Engine and the previous burn design is that $MKR tokens will now be acquired from the Uniswap V2 DAI/MKR pool, matched with additional DAI sourced from the Surplus Buffer, and supplied to the same market to increase the on-chain liquidity for MKR over time. The DAI/MKR LP tokens will be transferred to a protocol-owned address.
Surplus Buffer Upper Limit is set at 50 million DAI, lowered from the current 250M DAI target. This means that the Smart Burn Engine will activate when there is more than 50 million DAI available in the Surplus Buffer.
This will result in an estimated 123,600 MKR acquired and 185.7 million DAI used (accounting for matched DAI) per annum, which will result in accumulation and increased liquidity of approximately $183M worth of MKR/DAI Univ2 LP tokens.
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