What could affect the price of SKY?
Sky (SKY) is going through an important phase with key updates to its system and changes in the market.
- MKR Migration Deadline – Starting September 18, penalties apply to those who haven’t converted MKR tokens, encouraging faster swaps.
- Buyback Program – Sky has repurchased 1.1 billion SKY tokens, reducing the total supply by 3.28%.
- USDS Stablecoin Growth – The supply of USDS has grown to $7.5 billion, up 29% year-over-year, strengthening the Sky ecosystem.
Deep Dive
1. MKR-to-SKY Transition (Possible Negative or Neutral Effect)
What’s happening: Exchanges like Binance and Bitvavo will stop supporting MKR tokens between September 12 and 15, 2025. They will convert MKR holdings to SKY tokens at a rate of 1 MKR to 24,000 SKY. If holders don’t convert by September 18, a penalty will reduce the conversion rate by 1% every three months.
What this means for you: Some MKR holders might sell quickly to avoid penalties, which could temporarily put downward pressure on SKY’s price. However, once conversions are complete, SKY’s community and governance should become more stable and aligned. For more details, see CEX.IO’s MKR to SKY migration guide.
2. Buyback-Driven Scarcity (Positive Effect)
What’s happening: Since May 2025, the Sky Protocol has used about $80 million USDS to buy back 1.1 billion SKY tokens, cutting the total supply by over 3%. These buybacks happen weekly, averaging $1 million USDS, and are managed by the community through decentralized governance.
What this means for you: Reducing the number of SKY tokens available can help support or increase the price over time. However, this depends on the protocol’s revenue, which is linked to how widely USDS is used and how active the decentralized finance (DeFi) ecosystem remains. Learn more from the Sky Ecosystem update.
3. USDS Growth & Regulatory Risks (Mixed Effect)
What’s happening: The USDS stablecoin supply has reached $7.5 billion, growing 8.2% month-over-month. It offers a 4.5% annual interest rate through Sky Savings and works with Layer 2 solutions like Optimism to improve speed and reduce costs. However, S&P Global gave USDS a “B-” rating, noting risks like centralization (the founder owns 9% of governance tokens) and limited financial reserves.
What this means for you: More people using USDS helps increase SKY’s usefulness as a governance token. But regulatory challenges or sudden drops in liquidity could cause USDS to lose its stable value, which might lead to SKY token selloffs. For more information, check out S&P Global’s analysis.
Conclusion
The future price of SKY depends on smooth MKR-to-SKY conversions, ongoing buybacks, and USDS maintaining its stability. While new upgrades and reducing token supply are positive signs, risks like centralized governance and overall crypto market ups and downs remain. The key question is: Will SKY’s staking rewards of 4.95% APY attract enough interest to balance out any volatility from the MKR migration? Keep an eye on how many MKR tokens get converted and USDS activity after September 18.
What are people saying about SKY?
The Sky (SKY) community is balancing optimism about buybacks with caution from S&P’s rating, while large investors watch for technical rebounds. Here’s what’s trending:
- Weekly buybacks reduce SKY supply by 3.28%
- S&P gives SKY a B- rating, highlighting governance risks
- Traders predict a 20% price increase if SKY holds $0.088
Deep Dive
1. @SkyEcosystem: Weekly buybacks remove 1.11 billion SKY tokens — a positive sign
"Sky Protocol spent 1.39 million USDS last week to buy back 17.32 million SKY."
– @SkyEcosystem (Official account · August 18, 2025)
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What this means: This is good news for SKY holders. Regular buybacks reduce the number of tokens available on the market, which can support the price. It also shows the project’s commitment to its tokenomics. At this pace, about 0.06% of the total supply is taken out each week.
2. @mkbijaksana: Technical analysis suggests a rebound if $0.088 holds — bullish signal
"SKY may rise to $0.088 if the 21-day EMA holds."
– @mkbijaksana (2,100 followers · August 27, 2025)
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What this means: Traders who use charts see $0.0729 as a key support level where the price could reverse upward. The 21-day exponential moving average (EMA) at $0.0703 lines up with support from July, making this a strong technical area to watch.
3. S&P Global: B- rating points to governance and capitalization concerns — bearish outlook
"S&P highlights centralized governance and weak capitalization as main issues."
– CoinMarketCap (August 11, 2025)
What this means: This rating is a warning sign for SKY. Institutional investors might see more risk here and expect higher returns to compensate. The rating reflects concerns about concentration of tokens (top 10 wallets hold 23%) and the strong influence of founder Rune Christensen.
4. @CoinbaseAssets: SKY/USDS trading now available on Coinbase — neutral impact
"SKY and USDS are now live on Coinbase apps."
– @CoinbaseAssets (1.2 million followers · July 10, 2025)
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What this means: Being listed on Coinbase usually helps with liquidity, making it easier to buy and sell. However, it doesn’t guarantee the price will go up. In fact, SKY’s 24-hour trading volume dropped 15% after the listing, indicating limited retail interest so far.
5. Binance migration: MKR to SKY swap deadline approaching — mixed effects expected
"Final MKR-to-SKY swaps must be completed by September 18, 2025, or penalties will apply."
– CEX.IO (August 15, 2025)
What this means: This is a mixed situation. About 43% of MKR tokens have not yet been swapped for SKY. Forced conversions could lead to selling pressure, but completing the migration successfully would strengthen SKY’s role in governance.
Conclusion
The outlook for SKY is mixed. On one hand, aggressive tokenomics like buybacks and a 12.75% staking APY are positive. On the other hand, structural risks highlighted by S&P’s governance concerns remain. Keep an eye on the MKR-to-SKY conversion rate before the September deadline — faster conversions could cause supply shocks, while delays might weaken confidence in the project’s long-term plan.
What is the latest news about SKY?
Sky is making important moves with exchange updates and earns a cautious credit rating. Here’s what you need to know:
- zondacrypto Converts MKR to SKY (September 18, 2025) – MKR tokens will automatically convert to SKY as zondacrypto stops MKR trading.
- CoinJar Adds SKY Trading (September 9, 2025) – SKY trading starts while MKR is being phased out.
- S&P Global Gives Sky a “B-” Credit Rating (August 11, 2025) – The first credit rating for a DeFi protocol highlights some risks around governance and liquidity.
In-Depth Look
1. zondacrypto Converts MKR to SKY (September 18, 2025)
What happened:
zondacrypto will automatically swap MakerDAO’s MKR tokens for Sky (SKY) at a fixed rate of 1 MKR to 24,000 SKY. MKR deposits stopped on September 10, and MKR will be fully removed from the exchange by September 16. SKY trading with Polish Zloty (PLN) and USDC pairs starts on September 18.
Why it matters:
This move helps unify the transition to SKY across platforms, making things simpler for users. However, because the conversion rate is fixed, some MKR holders might sell their new SKY tokens quickly, which could put downward pressure on SKY’s price. (zondacrypto)
2. CoinJar Adds SKY Trading (September 9, 2025)
What happened:
CoinJar, a regulated Australian exchange, started offering SKY trading and allowed MKR swaps until September 14. They highlight SKY as part of MakerDAO’s updated ecosystem, aiming to make it easier for Australian users to access.
Why it matters:
This is a positive sign for SKY’s adoption, especially since CoinJar follows strict regulations (registered with AUSTRAC). This could attract more serious investors. Still, the upcoming MKR delisting might cause some short-term selling pressure from holders switching over. (CoinJar)
3. S&P Global Gives Sky a “B-” Credit Rating (August 11, 2025)
What happened:
S&P Global gave Sky a “B-” credit rating, noting concerns about centralized control—founder Rune Christensen holds 9% of governance—and a low risk-adjusted capital ratio of 0.4%. The stability of Sky’s USDS stablecoin was rated as “constrained” due to regulatory uncertainties.
Why it matters:
While this rating points to some risks and may limit institutional trust for now, it’s a significant milestone for decentralized finance (DeFi). The stable outlook means Sky is currently meeting its financial obligations, but improving the rating will require more decentralization and stronger capital reserves. (Binance News)
Conclusion
Sky’s moves to migrate MKR tokens and expand exchange support show growing infrastructure strength. Meanwhile, S&P’s credit rating highlights ongoing concerns about centralization. With over half of MKR already converted to SKY ahead of the September 18 deadline, the big question is whether faster conversions will help stabilize SKY’s value or create selling pressure that lowers it.
What is expected in the development of SKY?
Sky’s roadmap focuses on improving governance, growing its ecosystem, and hitting key technical milestones.
- Delayed Upgrade Penalty Starts (Sept 18, 2025) – A 1% penalty applies to MKR holders who haven’t switched to SKY, increasing over time.
- SKY Trading Launches on Binance (Sept 17, 2025) – SKY/BTC and SKY/USDT trading pairs go live after MKR is removed.
- Sky Core Simplification (Q4 2025) – A plan to simplify governance and boost growth of ecosystem subgroups called “Stars.”
- Penalty Increases (Dec 2025) – The upgrade penalty grows by 1% every three months unless governance steps in.
In-Depth Look
1. Delayed Upgrade Penalty Starts (Sept 18, 2025)
What’s happening:
Starting September 18, 2025, MKR token holders who haven’t upgraded to SKY will face a 1% penalty on their holdings. This penalty will increase by 1% every three months. The goal is to encourage everyone to move to SKY, which is the new token for governance in the Sky protocol (Sky Protocol Docs).
Why it matters:
In the short term, this could put downward pressure on SKY since some MKR holders might sell or convert under penalty. But in the long run, it’s positive because it helps unify governance under SKY, making the system more efficient. Expect some shifts in trading volume as exchanges like Binance stop supporting MKR.
2. SKY Trading Launches on Binance (Sept 17, 2025)
What’s happening:
Binance will start trading SKY on September 17, 2025, replacing MKR trading pairs. If you hold MKR on Binance, it will automatically convert to SKY, making the switch easier for users (Binance Announcement).
Why it matters:
This is good news for SKY’s liquidity and exposure, especially since Coinbase also plans to list SKY in July 2025. However, new listings often cause price swings, so expect some short-term volatility.
3. Sky Core Simplification (Q4 2025)
What’s happening:
The community is proposing to simplify Sky’s core governance structure. This includes supporting “Stars,” which are smaller groups within the ecosystem like Spark and Grove. The goal is to make governance easier and encourage more participation, aligning with Sky’s vision to decentralize control (Sky Ecosystem Update).
Why it matters:
If successful, this could attract bigger players like institutions, especially since Grove has a $1 billion plan for tokenized credit strategies. However, reaching agreement among all stakeholders might take time.
4. Penalty Increases (Dec 2025)
What’s happening:
The penalty for not upgrading from MKR to SKY will increase to 2% in December 2025 and continue rising by 1% every three months unless governance decides otherwise. This is part of a plan to phase out MKR gradually (Upgrade Timeline).
Why it matters:
This is neutral for SKY overall. The impact depends on how many MKR tokens remain unconverted (about 44% as of August 2025). Fewer MKR tokens could mean less selling pressure but might also slow new investments until the penalty stabilizes.
Conclusion
Sky’s roadmap is focused on unifying governance through SKY, expanding decentralized finance (DeFi) partnerships, and boosting liquidity via exchange listings. The upcoming penalty on September 18 and Binance’s SKY listing are key near-term events. Meanwhile, the Core Simplification plan could reshape how the ecosystem grows in the future. The big question: how will Sky balance encouraging decentralization while attracting institutional investors?
What updates are there in the SKY code base?
Sky’s latest code updates focus on improving governance, token economics, and scaling the ecosystem.
- Core Simplification Proposal (July 24, 2025) – Simplifying the protocol to speed up growth.
- MKR-to-SKY Upgrade Mechanism (September 18, 2025) – Penalties for users who delay swapping old MKR tokens for SKY.
- Decentralized Buyback System (Ongoing) – Automated SKY token buybacks to reduce supply.
Deep Dive
1. Core Simplification Proposal (July 24, 2025)
Overview: This proposal aims to make Sky Protocol’s core system simpler and more modular. By doing so, it will be easier and faster to add new features and projects, called “Stars,” to the ecosystem. The plan includes merging duplicate smart contracts and improving transaction efficiency, which lowers costs for users and developers.
What this means: This is good news for SKY holders because a simpler, more efficient system can attract more developers and projects, increasing the token’s usefulness. (Source)
2. MKR-to-SKY Upgrade Mechanism (September 18, 2025)
Overview: To encourage users to swap their old MKR tokens for the new SKY tokens on time, the protocol introduces penalties. Starting at a 1% loss per quarter for delayed swaps, the conversion rate decreases significantly after the deadline—from 1 MKR equaling 24,000 SKY before the deadline to only 0.78 SKY after. Node operators must enforce this by mid-September.
What this means: This change is neutral for SKY overall. It helps keep the system unified, but if many users delay upgrading, it could temporarily split governance participation. (Source)
3. Decentralized Buyback System (Ongoing)
Overview: The protocol uses part of its revenue (about $1.39 million USDS weekly as of August 2025) to automatically buy back SKY tokens from the market. This system is controlled by Sky Atlas parameters and activates when treasury reserves reach certain levels. So far, over 1.1 billion SKY tokens (about 3.2% of total supply) have been permanently removed from circulation.
What this means: This is positive for SKY holders because reducing the number of tokens available can increase the value of remaining tokens if demand stays strong. (Source)
Conclusion
Sky’s recent code improvements focus on making the protocol more sustainable by aligning governance, managing token supply, and supporting developers. With the MKR upgrade deadline coming up, it will be important to watch how many token holders complete the swap and how that affects the network’s decentralization.
Why did the price of SKY fall?
Sky (SKY) dropped 3.89% in the last 24 hours, underperforming the overall crypto market, which rose 1.01%. The main reasons are:
- Migration sell pressure – Several exchanges are removing MKR tokens and converting them to SKY before set deadlines (like Bitvavo’s cutoff on Sept 12).
- Technical resistance – SKY’s price hit a key level at $0.073 and was pushed back down, now testing a support level based on Fibonacci retracement.
- S&P rating impact – A B- credit rating renewed worries about SKY’s governance and liquidity risks.
In-Depth Analysis
1. Migration Overhang (Negative Impact)
What’s happening:
Exchanges such as CoinJar, Bitvavo, and zondacrypto are automatically swapping MKR tokens for SKY at a ratio of 1 MKR to 24,000 SKY. These swaps must be completed by mid-September (Sept 12–18). Since June, over $72 million worth of MKR has been converted (CoinJar announcement). This process is creating selling pressure as users cash out their new SKY tokens.
Why it matters:
This migration increases the total amount of SKY available (currently 23.4 billion SKY), which can lower the price. It also encourages short-term selling as holders look to take quick profits. Past token swaps like this often cause price swings until the migration ends.
What to watch:
Keep an eye on how much SKY remains on exchanges after Sept 18. If large amounts stay, selling pressure could continue.
2. Technical Breakdown (Neutral to Bearish)
What’s happening:
SKY’s price fell below a key pivot point at $0.073091 and the 50% Fibonacci retracement level at $0.072597. The MACD indicator, which helps show momentum, is still below its signal line, suggesting bearish momentum, even though the histogram shows some positive signs.
Why it matters:
Traders are watching the 61.8% Fibonacci support level at $0.0697 closely. If the price drops below this, it could head toward the 200-day moving average, also near $0.0697. The RSI (Relative Strength Index) is at 51.27, indicating the token is neither oversold nor overbought, so there’s room for the price to fall further.
3. S&P Rating Hangover (Negative Sentiment)
What’s happening:
On August 8, S&P gave SKY a B- credit rating (S&P report), highlighting concerns about the concentration of deposits and weak capital reserves. This rating has made institutional investors more cautious.
Why it matters:
The rating reinforced the idea that SKY is a higher-risk investment. Trading volume dropped 39% to $24.3 million, meaning fewer buyers and sellers, which can cause bigger price swings.
Conclusion
Sky’s recent price drop is mainly due to increased supply from the MKR-to-SKY migration, technical resistance at key price levels, and ongoing concerns from its below-investment-grade credit rating. While buybacks have removed 1.1 billion SKY tokens since July, providing some long-term support, short-term risks remain high.
What to watch: Can SKY hold the 61.8% Fibonacci support at $0.0697 amid ongoing selling? Also, monitor SKY balances on exchange wallets after the Sept 12 migration deadlines.