Why did the price of SKY go up?

Sky (SKY) increased by 3.77% in the last 24 hours, outperforming the overall crypto market, which rose by 1.66%. Here’s why:

1. Migration Finalization – Major exchanges completed the swap from MKR to SKY today.
2. Buyback Momentum – The protocol spent $1.39 million USDS last week to repurchase 17.32 million SKY tokens.
3. Technical Breakout – The price surpassed an important resistance level at $0.076.

Deep Dive

1. Migration Completion (Positive for SKY)

Overview: Exchanges such as zondacrypto finished the last step of converting MakerDAO’s (MKR) tokens to SKY today (September 18). This swap happened automatically at a fixed rate of 1 MKR to 24,000 SKY. This process removed leftover selling pressure from users who delayed upgrading.
What this means: By forcing these conversions, the actual number of SKY tokens available in the market decreased. It also aligned token holders with the governance system of Sky Protocol. Penalties for late upgrades are now in effect, discouraging people from holding onto MKR tokens any longer.

2. Buyback Program Acceleration (Positive for SKY)

Overview: Sky Protocol repurchased 17.32 million SKY tokens last week, spending about $1.33 million through its decentralized buyback system. Since June 2025, the protocol has bought back a total of 1.12 billion SKY tokens, which is about 4.78% of the total supply.
What this means: These ongoing buybacks reduce the number of tokens available for sale, which supports the price. This is important because today’s trading volume of $107 million represents only 6% of SKY’s $1.8 billion market value. The protocol uses its revenue—about $230 million annually—to fund these purchases, creating steady demand for SKY.

3. Technical Momentum (Mixed Signals)

Overview: SKY’s price moved above a key resistance level at $0.0761, based on the 23.6% Fibonacci retracement. The Relative Strength Index (RSI) over 7 days is at 65, indicating positive momentum but not yet overbought. The MACD indicator turned positive on September 16 as the price crossed above the 7-day moving average of $0.0745.
What to watch: A close above $0.078 (the high for September) would confirm stronger upward momentum.

What could affect the price of SKY?

The price of Sky (SKY) is influenced by a mix of protocol updates, regulatory concerns, and changing market conditions.

1. Migration Deadline Pressure – Penalties for not upgrading from MKR to SKY start on September 18, 2025, creating urgency for holders.
2. Staking & Buyback Programs – Over $1.1 billion worth of SKY tokens have been bought back (about 3.28% of total supply), and staking rewards above 15% encourage holding, reducing available supply.
3. Regulatory Attention – S&P gave SKY a “B-” rating, highlighting risks like centralized control and liquidity issues.
4. Exchange Listings – Platforms like Coinbase adding SKY/USDS trading pairs improve liquidity but may also increase price swings.

Deep Dive

1. MKR-to-SKY Migration & Penalty (Mixed Effects)

What’s happening:
Sky (SKY) is replacing MKR as the governance token for MakerDAO at a ratio of 1 MKR to 24,000 SKY. Starting September 18, 2025, anyone who hasn’t upgraded will face a penalty that reduces their SKY rewards by 1% every quarter. So far, over 56% of MKR holders have already made the switch (zondacrypto, Bitget).

What this means for you:

• Positive side: As the deadline approaches, demand for SKY could rise sharply as holders rush to upgrade.
• Negative side: After the deadline, some holders might sell their SKY tokens due to reduced rewards, which could put downward pressure on the price.

2. Staking Rewards & Buybacks (Positive Impact)

What’s happening:
People who stake SKY tokens can earn up to 15.07% annual returns paid in USDS stablecoins. Currently, $960 million worth of SKY is locked in staking. The protocol generates about $230 million per year, which it uses to buy back SKY tokens weekly. Since 2024, 1.1 billion SKY tokens (about 3.2% of the total supply) have been taken out of circulation (Sky Risk Dashboard).

What this means for you:

• The combination of staking rewards and buybacks reduces the number of tokens available to trade, which can help support or increase the price.
• However, if too many people stake and rewards grow faster than buybacks, the benefits might be diluted.

3. Regulatory & Market Sentiment (Negative Impact)

What’s happening:
In August 2025, S&P gave SKY a “B-” credit rating. They pointed out concerns like a low risk-adjusted capital ratio (0.4%) and the fact that founder Rune Christensen controls 9% of governance votes (The Block). On the technical side, SKY’s 50-day moving average price of $0.0728 is acting as support, but the Relative Strength Index (RSI) at 65.24 suggests the token is nearing overbought levels.

What this means for you:

• Institutional investors might be cautious, limiting price growth despite the expanding decentralized finance (DeFi) market.
• If the price struggles to break above resistance around $0.085, a short-term pullback could happen.

Conclusion

The future price of SKY depends on how smoothly the MKR-to-SKY migration finishes, whether staking demand remains strong, and how the project handles regulatory scrutiny. While buybacks and high staking yields offer short-term price support, concerns about centralized governance and S&P’s cautious rating present ongoing risks. Keep an eye on how quickly MKR holders upgrade and the volume of weekly buybacks to gauge market direction. Will new exchange listings help balance out selling pressure after migration? Time will tell.

What are people saying about SKY?

The Sky (SKY) community is balancing excitement over buybacks and staking rewards with concerns about upcoming deadlines and governance risks. Here’s the latest:

1. Over $1 billion worth of SKY tokens burned through weekly buybacks
2. Attractive 12.75% annual staking rewards drawing yield seekers
3. Deadline for swapping MKR to SKY is approaching (penalties start Sep 18)
4. S&P gave SKY a “B-” credit rating, highlighting governance risks

Deep Dive

1. Buyback Activity Hits 1.1 Billion SKY Tokens — Positive Signal

“Spent 1.39 million USDS last week to buy back 17.32 million SKY tokens — total buybacks now 3.28% of supply”
– @SkyEcosystem (Official account · Aug 18, 2025)
View original post

What this means: This is a good sign for SKY holders. Regular buybacks reduce the number of tokens available in the market, which can support the token’s price. It also shows the protocol is generating steady revenue, averaging about $250,000 daily.

2. Technical Analysis Points to Potential Price Rise — Bullish Outlook

“SKY formed a bullish engulfing candle pattern — next resistance at 21-day EMA, target price $0.088 if momentum continues”
– @mkbijaksana (Trader · Aug 27, 2025)
View original post

What this means: Traders see a possible short-term price increase of about 15% from the current $0.0762. However, the Relative Strength Index (RSI) is at 66, which suggests the price might pause or consolidate before moving higher.

3. S&P Global Rates SKY “B-” Due to Governance Concerns — Caution Advised

“Credit rating reflects risks from founder’s 9% control over governance”
– S&P Global (Aug 11, 2025)
View analysis

What this means: This rating signals potential risks for large investors. SKY’s governance is somewhat centralized, with the founder holding significant control. This could make some institutional investors hesitant, despite the project’s innovations in decentralized finance (DeFi).

4. Coinbase Listing Sparks Interest — Impact Still Unclear

“SKY/USDS trading pair is now live — past listings show volume can jump 50% after launch”
– @CoinbaseAssets (Jul 10, 2025)
View announcement

What this means: The listing could boost trading activity and liquidity for SKY. However, it’s too early to tell if this will lead to sustained growth. The token has dropped about 9% over the past 60 days, so increased volume might help stabilize the price.

Conclusion

The outlook for SKY is mixed. On one hand, strong buybacks and high staking rewards are positive signs. On the other, governance risks and the upcoming MKR to SKY token swap deadline add uncertainty. With 56% of the swap completed by early August, the penalty phase starting September 18 could cause sudden changes in token supply.

The big question remains: Can SKY’s protocol revenue maintain $100 million per year to support this unique DeFi credit experiment? Keep an eye on how these factors develop.

What is the latest news about SKY?

Sky is making important moves with exchange updates and staking milestones as it speeds up its rebranding process. Here’s a quick summary of the latest news:

1. Migration Support on zondacrypto (September 18, 2025) – Automatic swaps from MKR to SKY start, making it easier to trade SKY.
2. CoinJar SKY Listing (September 9, 2025) – SKY trading goes live for Australian users before MKR is removed.
3. Hyperliquid USDH Proposal (September 9, 2025) – Plans to add a new stablecoin with attractive yield rewards.

In-Depth Look

1. Migration Support on zondacrypto (September 18, 2025)

What happened:
zondacrypto now supports automatic conversion from MKR tokens to SKY tokens at a fixed rate of 1 MKR to 24,000 SKY. MKR deposits and withdrawals stopped on September 16, and SKY trading pairs (SKY/PLN and SKY/USDC) started on September 18.

Why it matters:
This update makes it easier for people holding MKR to switch to SKY and trade it in European markets. However, if users delay upgrading after September 18, they might face penalties, which could reduce the amount of MKR available for trading. (zondacrypto)

2. CoinJar SKY Listing (September 9, 2025)

What happened:
CoinJar, a popular Australian exchange, added SKY trading as part of the rebranding from MakerDAO. MKR will be removed from CoinJar on September 14, so users need to swap their tokens before then.

Why it matters:
This listing makes SKY more accessible to Australian traders but swapping tokens could have tax consequences. Since CoinJar is regulated by AUSTRAC, it might attract more cautious institutional investors. (CoinJar)

3. Hyperliquid USDH Proposal (September 9, 2025)

What happened:
Sky proposed adding Hyperliquid’s USDH stablecoin, which offers a 4.85% yield and includes a $25 million investment to support decentralized finance (DeFi) growth on the Hyperliquid platform.

Why it matters:
If approved, this would expand Sky’s stablecoin options and could bring in more investment from projects built on the Solana blockchain. However, using third-party platforms like Hyperliquid comes with some risks since Sky depends on their security and reliability. (CryptoPatel)

Conclusion

Sky’s ongoing migration and new exchange listings highlight its move away from MakerDAO’s legacy. New partnerships aim to strengthen its presence in DeFi. The deadline for MKR token conversion after September 18 could speed up the consolidation of SKY tokens in the market.

What is expected in the development of SKY?

Sky’s roadmap is focused on improving governance, expanding its ecosystem, and optimizing its protocol:

1. Delayed Upgrade Penalty (September 18, 2025) – A penalty starts at 1% for MKR holders who haven’t upgraded to SKY.
2. Sky Core Simplification (Q4 2025) – Plans to simplify governance to speed up growth of “Stars” (subDAOs).
3. Powerhouse Spin-off (2025–2026) – Creating a separate decentralized operations platform aimed at institutional DeFi users.

In-Depth Look

1. Delayed Upgrade Penalty (September 18, 2025)

What’s happening:
Starting September 18, 2025, MKR holders who haven’t switched to SKY will face a 1% penalty on conversions from MKR to SKY. This penalty increases by 1% every three months. The goal is to encourage all MKR holders to upgrade to SKY, unifying governance under the new token (Sky Protocol Docs).

Why it matters:

• Positive: Reduces the number of old MKR tokens, which could make SKY more valuable by limiting supply.
• Potential downside: Some holders might sell quickly to avoid penalties, causing short-term price drops.

2. Sky Core Simplification (Q4 2025)

What’s happening:
The community is proposing to simplify Sky’s governance system. This means making it easier to manage and make decisions, especially for “Stars” — smaller groups within the ecosystem like Spark and Grove. This includes better management of funds and faster decision-making (SkyEcosystem tweet).

Why it matters:

• Positive: A simpler governance system could attract big institutional investors, like Grove’s $1 billion investment in tokenized CLOs.
• Neutral: There’s a risk that voters might not engage enough, which can slow down changes.

3. Powerhouse Spin-off (2025–2026)

What’s happening:
Powerhouse, which handles decentralized operations for Sky, plans to become its own independent company. This involves setting up legal structures, designing its own token system, and bringing in clients outside the Sky ecosystem (Powerhouse Roadmap).

Why it matters:

• Positive: This move could create new revenue sources beyond just Sky’s current ecosystem.
• Potential downside: Focusing on the spin-off might take resources away from improving the main Sky protocol.

Conclusion

Sky’s roadmap aims to tighten token management, modernize governance, and diversify its ecosystem. The September 18 penalty deadline is a key event that could cause price swings. Meanwhile, the growth of Stars and the Powerhouse spin-off are designed to bring more institutional players into DeFi. The big question is whether Sky’s focus on subDAOs will strengthen governance or create challenges with coordination.

What updates are there in the SKY code base?

Sky’s technology is moving forward with important updates to its governance and new partnerships with big institutions.

1. Core Simplification Proposal (July 24, 2025) – Makes the system easier to use and faster to grow.
2. Star Allocation System Launch (July 3, 2025) – Allows large investors to put money into tokenized credit strategies using smart contracts.
3. MKR-to-SKY Migration Deadline (September 18, 2025) – Penalties start for users who don’t upgrade their tokens on time.

In-Depth Look

1. Core Simplification Proposal (July 24, 2025)

What’s happening: Sky is simplifying its main protocol to make it less complicated and more scalable, especially for its “Stars” (which are smaller, community-run groups within the network).

The update breaks down governance and reward systems into smaller parts, making it easier to add new features quickly. Developers also reduced how much smart contracts depend on each other, which could lower transaction fees for users.

Why it matters: This is good news for SKY because a simpler system can attract more developers and projects, increasing its usefulness. However, there’s a risk that some existing tools might not work smoothly during the transition.
(Source)

2. Star Allocation System Launch (July 3, 2025)

What’s happening: With Grove joining the network, Sky now supports automated management of $1 billion in institutional investments into tokenized credit products.

This update uses smart contracts to allocate funds in real time based on risk, including assets like Centrifuge’s tokenized CLOs (collateralized loan obligations). It also increases the use of USDS in decentralized finance (DeFi) lending and borrowing.

Why it matters: This is neutral for SKY in the short term. While institutional involvement could create steady demand for USDS and indirectly for SKY, the success depends on consistent returns from these investments.
(Source)

3. MKR-to-SKY Migration Deadline (September 18, 2025)

What’s happening: Users who haven’t upgraded their MKR tokens to SKY by the deadline will face a 1% penalty every quarter, enforced automatically on the blockchain.

The conversion rate will decrease over time—from 1 MKR equaling 24,000 SKY to just 0.78 SKY after the deadline. By August 2025, over 56% of MKR tokens had already been migrated.

Why it matters: This could create downward pressure on SKY’s price if many users rush to sell their tokens due to penalties. On the other hand, successful migration might reduce the number of tokens available for sale, which could stabilize the market.
(Source)

Conclusion

Sky’s recent updates focus on making the platform more scalable and integrating real-world assets, balancing innovation in decentralized finance with the needs of large investors. The big question is whether the simpler governance system will attract enough developers to address concerns about centralization raised by rating agencies like S&P.