Why did the price of SKY go up?
Sky (SKY) increased by 2.19% in the last 24 hours, outperforming the overall crypto market’s modest 0.22% gain. The main reasons behind this rise include:
- Migration Deadline Pressure – Starting September 18, penalties for delaying the MKR-to-SKY token swap kicked in, pushing holders to convert or buy SKY.
- Launch of Perpetual Futures – SKY/USDT perpetual futures with 25x leverage went live on Helix (Injective), attracting traders looking to speculate.
- Technical Rebound – An oversold condition indicated by the RSI and some buyback activity helped SKY recover despite a weak broader market.
Deep Dive
1. Migration Deadline Penalty (Positive for SKY)
What happened: On September 18, the MKR-to-SKY token migration entered a penalty phase. This means if holders delayed converting MKR tokens to SKY, they would get fewer SKY tokens in return (1 MKR now equals 0.78 SKY instead of the original 24,000 SKY). Exchanges like Bitbank and EXMO set firm deadlines for this conversion (Bitbank).
Why it matters: This deadline pushed holders to either convert their MKR tokens or buy SKY directly to avoid losing value. This reduced the available supply of SKY on the market, helping its price rise by 2.19%.
What to watch: Keep an eye on MKR token balances on the blockchain. A drop in MKR holdings could mean the migration is wrapping up, which might reduce upward pressure on SKY’s price.
2. Increased Interest in Derivatives (Mixed Effects)
What happened: On September 18, Helix launched SKY perpetual futures, allowing traders to bet on SKY’s price with up to 25 times leverage (Helix).
Why it matters: This brought new trading activity and liquidity, which is generally good for price growth. However, the high leverage also increases the risk of forced selling if prices move against traders. Despite the price increase, trading volume dropped by about 25.89%, suggesting traders are cautious.
What to watch: The $0.0665 price level is important support. If SKY falls below this, it could trigger a wave of forced sell-offs (liquidations).
3. Technical Rebound (Neutral Influence)
What happened: SKY’s 7-day Relative Strength Index (RSI) hit 30.36, signaling it was oversold and due for a bounce. The price stayed above its 30-day simple moving average ($0.0703), though the MACD indicator remains negative but is improving.
Why it matters: Short-term traders likely saw this as a buying opportunity. However, the drop in trading volume raises questions about how long this rebound can last. The 200-day exponential moving average ($0.0719) now acts as a resistance level SKY needs to overcome.
Conclusion
Sky’s recent price increase is mainly driven by the pressure from the MKR-to-SKY migration deadline and new trading opportunities from perpetual futures. However, low trading volume and some bearish technical signals suggest caution.
Key points to monitor:
- Can SKY maintain support above $0.065, especially if Bitcoin’s market dominance (currently 57.74%) continues to rise?
- Watch the ongoing MKR-to-SKY conversion activity on exchanges to gauge if migration demand is still influencing the market.
What could affect the price of SKY?
Sky (SKY) price is balancing between upcoming protocol changes and market challenges.
- MKR Migration Penalty – After September 18, penalties on converting MKR to SKY may push holders to act quickly or sell off.
- DeFi Adoption – Over $2 billion in savings and rewards locked in shows strong demand for USDS and SKY.
- Buyback Activity – The protocol has bought back more than 1.1 billion SKY tokens (worth over $80 million), reducing the available supply.
In-Depth Analysis
1. MKR-to-SKY Migration Deadline (Potentially Negative or Neutral)
What’s happening?
Starting September 18, 2025, there will be a penalty that reduces the amount of SKY you get when converting MKR by 1% every quarter. So far, more than half of MKR tokens have been converted, but about 44% (around 103 million MKR) still need to be migrated. Some exchanges like Binance and Bitfinex have already removed MKR trading, which puts pressure on holders to act.
Why it matters:
If holders decide to sell their MKR instead of converting, this could cause short-term price drops. On the other hand, if many convert before the penalty kicks in, it would reduce the number of SKY tokens in circulation, which might help push prices up. Similar events in the past, like MakerDAO’s fee changes in 2021, caused noticeable price swings around deadlines.
2. Protocol Revenue & Buybacks (Positive Outlook)
What’s happening?
Sky Protocol earns about $100 million a year, and half of that goes toward buying back SKY tokens. On average, the protocol buys back $1 million worth of USDS weekly, removing roughly 15 million SKY tokens from circulation. So far, over 1.1 billion SKY tokens (about 3.2% of total supply) have been permanently taken out of the market.
Why it matters:
These buybacks reduce the total supply of SKY, which can increase its value, especially if the protocol’s revenue grows as more people use USDS. However, SKY’s price has dropped about 26% over the past 60 days, suggesting that demand hasn’t fully kept up with these buybacks. Key numbers to watch include the total USDS supply (currently $7.5 billion) and the amount saved in Sky Savings (around $2 billion).
3. Regulatory Environment (Mixed Effects)
What’s happening?
On August 11, 2025, S&P Global gave Sky Protocol a “B-” rating, pointing out concerns like the founder controlling 9% of voting power and limited financial reserves. On the flip side, comments from SEC Chair Paul Atkins supporting decentralized finance (DeFi) on June 10 helped SKY’s price jump 13% in one week.
Why it matters:
Clearer regulations could bring more institutional investors to SKY, but the S&P rating highlights some risks. SKY’s price is closely linked to Ethereum (ETH), with a strong positive correlation this year, meaning it often moves in line with the broader DeFi market. Upcoming U.S. stablecoin legislation or European regulations like MiCA could cause price swings.
Conclusion
Sky’s future depends on how smoothly the MKR migration goes, whether the protocol can keep growing its revenue, and how regulations evolve. The September 18 penalty deadline is a critical moment — it could either speed up the reduction of SKY tokens or lead to MKR holders selling off. Meanwhile, daily buybacks of $250,000 and staking yields near 14.5% offer positive support. Keep an eye on the stability of the SKY/USDS peg and any new ratings from S&P for clues on where things are headed.
Will Grove, Sky’s institutional credit arm, drive the next big increase in total value locked (TVL)?
What are people saying about SKY?
The Sky (SKY) community is weighing optimism from buybacks against regulatory challenges. Here’s what’s trending:
- Positive chart signals suggest a potential price rebound to $0.088
- $1.4 million in weekly buybacks remove 3.28% of SKY’s circulating supply
- New listing on Phemex exchange brings hopes for increased trading activity
- S&P’s “B-” credit rating raises concerns about governance and centralization
In-Depth Look
1. @mkbijaksana: Daily bullish engulfing pattern signals rebound
“SKY formed a bullish engulfing candle… may rise up to 0.088”
– @mkbijaksana (X followers · August 27, 2025, 06:52 UTC)
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What this means: A bullish engulfing pattern is a common technical indicator that often signals a trend reversal. Combined with support at the 21-day exponential moving average (EMA) around $0.066, this suggests SKY’s price could bounce back toward $0.088.
2. @SkyEcosystem: Over $80 million in total buybacks
“1.12 billion SKY bought back… 3.28% of supply” (August 4, 2025)
– @SkyEcosystem (X followers · August 4, 2025, 1:45 PM UTC)
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What this means: The protocol has repurchased 3.28% of SKY’s circulating supply, creating scarcity that can support price growth. However, the current buyback rate of $250,000 per day is lower than the peak levels seen earlier in 2024.
3. @PhemexR: SKY now listed for spot trading on Phemex
“Новый Листинг на Спот ⚡️ #SKY” (Russian: New spot listing)
– @PhemexR (X followers · September 18, 2025, 09:07 AM UTC)
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What this means: Listing SKY on Phemex makes it easier for traders to buy and sell the coin. While this is generally positive, Phemex’s current daily trading volume of $36 million in SKY needs to grow steadily to significantly improve liquidity.
4. S&P Global: “B-” credit rating highlights risks
“High depositor concentration… weak capitalization” (August 8, 2025)
– S&P Global (Credit report · August 8, 2025, 09:25 AM UTC)
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What this means: S&P’s “B-” rating points to concerns about SKY’s governance and centralization, which could discourage institutional investors. Despite this, S&P acknowledges SKY’s strong treasury reserves of $700 million.
Conclusion
The outlook for SKY is mixed. Buybacks and positive technical signals support price growth, but governance concerns highlighted by S&P temper enthusiasm. The coin’s 190% year-to-date rally shows strong interest from retail investors, but deeper research is advised. Key factors to watch include continued buyback activity (currently about 17 million SKY per week) and wider adoption of the USDS stablecoin beyond its current $7 billion supply.
What is the latest news about SKY?
Sky is making big moves with exchange upgrades and new trading options while growing its presence with institutional investors. Here’s a quick summary of the latest news:
- SKY Perpetuals Launch on Helix (September 18, 2025) – Sky’s first on-chain derivatives go live, offering 25x leverage and fee discounts.
- MKR to SKY Token Swap Completed (September 18, 2025) – zondacrypto finished swapping MKR tokens for SKY at a rate of 1 MKR to 24,000 SKY.
- Stablecoin Growth with Hyperliquid (September 9, 2025) – Sky aims to issue the USDH stablecoin, promising 4.85% returns and access to $2.2 billion in liquidity.
In-Depth Look
1. SKY Perpetuals Launch on Helix (September 18, 2025)
What Happened:
Helix, a trading platform built on Injective Protocol, introduced SKY/USDT perpetual futures. These contracts let traders use up to 25 times their investment (leverage) and benefit from small fee rebates when they add liquidity to the market. This launch connects with Sky Protocol’s decentralized stablecoin system (USDS), allowing users to trade SKY’s governance token with leverage.
Why It Matters:
This is a positive step for SKY because derivatives like these increase trading activity and attract both casual and professional traders. The fee incentives encourage more market participation, and Helix’s zero gas fee setup fits well with Sky’s decentralized finance (DeFi) goals. However, the high leverage means prices could swing wildly, which adds risk for traders.
(Helix)
2. MKR to SKY Token Swap Completed (September 18, 2025)
What Happened:
zondacrypto finalized the token swap, converting MKR tokens to SKY at a fixed rate of 1 MKR = 24,000 SKY. They stopped accepting MKR deposits and withdrawals on September 16 and added new trading pairs for SKY with PLN and USDC.
Why It Matters:
This change is neutral in the short term but positive overall. It clears out old MKR tokens from the market and makes SKY more accessible with new trading options. Holders who delay upgrading their tokens will face increasing penalties starting September 18, encouraging them to switch sooner.
(zondacrypto)
3. Stablecoin Growth with Hyperliquid (September 9, 2025)
What Happened:
Sky Protocol submitted a bid to issue USDH, a stablecoin managed by Hyperliquid. This move offers investors a 4.85% yield, $25 million in funding for the Sky ecosystem, and access to $2.2 billion in USDC liquidity. This challenges Stripe’s Bridge stablecoin proposal in the decentralized finance space.
Why It Matters:
If successful, this would strengthen SKY’s role in the stablecoin market by adding USDH alongside its existing USDS stablecoin, which currently has over $7 billion in circulation. It would also open new revenue streams from institutional products. However, competing with centralized companies like Stripe could create challenges in managing governance and coordination.
(XT Blog)
Conclusion
Sky’s recent updates—like exchange migrations and new derivatives—show it’s growing into a key player in multi-chain decentralized finance. However, penalties for delayed MKR token upgrades starting September 18 may test how loyal holders remain. The big question is whether Sky’s push to issue USDH will help it maintain its lead in stablecoins against traditional finance competitors.
What is expected in the development of SKY?
Sky’s development is focused on growing its ecosystem and improving operations:
- Powerhouse Production Release (Q4 2024) – Completing the decentralized operations platform.
- Atlas Rulebook Editor (Q4 2024) – Improving governance documentation and integration.
- Powerhouse Spin-Off (Q4 2024) – Making Powerhouse an independent part of the ecosystem.
In-Depth Look
1. Powerhouse Production Release (Q4 2024)
What it is:
Sky is preparing to launch a fully functional version of its Decentralized Operations Platform. This platform will bring together key products like Fusion, Connect, and Switchboard into one system. Right now, the project is 92% complete, with final steps planned on Sky’s subdomains (Sky Fusion Roadmap).
Why it matters:
This is a positive development for SKY because it makes the ecosystem more transparent and improves reporting on real-world assets. This could attract larger, institutional users. However, any delays or technical problems could slow down how quickly people start using it.
2. Atlas Rulebook Editor (Q4 2024)
What it is:
This tool will formalize how governance rules are documented by integrating Notion-based documents into Sky’s Connect platform. The project is halfway done, with ongoing analysis and planning for 2025.
Why it matters:
This is somewhat positive—clearer governance rules can help decentralize control and improve community involvement. But if the tool isn’t fully delivered, it might cause confusion or split opinions within the community.
3. Powerhouse Spin-Off (Q4 2024)
What it is:
Sky is working on making Powerhouse a separate, independent entity. This involves legal setup (about 50% complete) and designing how its tokens will work (15% done). The goal is to expand and diversify Sky’s ecosystem.
Why it matters:
This is a high-risk, high-reward move. If successful, it could create new revenue opportunities. But if token design or legal issues aren’t resolved, it could reduce the value of SKY.
Summary
Sky’s roadmap focuses on strengthening its infrastructure and clarifying governance. The main risks involve how quickly these plans are executed and whether the Powerhouse spin-off succeeds. Watching the progress of these Q4 2024 goals and community reactions to the Sky Core Simplification Proposal (a recent governance plan) will be important to see if Sky can grow its user base or if delays will hold it back.
What updates are there in the SKY code base?
Sky’s software updates focus on improving governance and growing its ecosystem through important protocol changes.
- Delayed Upgrade Penalty Activation (September 18, 2025) – MKR token holders who don’t upgrade to SKY will face penalties.
- Core Simplification Proposal (July 24, 2025) – Simplifies the protocol’s structure to help the ecosystem grow faster.
- Staking Rewards Integration (May 29, 2025) – Introduces USDS rewards tied to how well the protocol performs.
In-Depth Look
1. Delayed Upgrade Penalty Activation (September 18, 2025)
What’s happening?
If MKR token holders don’t upgrade their tokens to SKY by this date, they will be penalized 1% of the token’s value right away. This penalty increases by 1% every three months after that.
Why?
This encourages users to switch to SKY, which is now the main token used for governance decisions in the protocol.
What does this mean?
For SKY, this change is neutral overall. It helps reduce confusion by consolidating governance under one token but might cause some short-term selling from those who delay upgrading. Keep an eye on how quickly MKR holders convert to SKY to gauge confidence.
(Source)
2. Core Simplification Proposal (July 24, 2025)
What’s happening?
A proposal aims to simplify the core technology behind Sky Protocol by removing unnecessary parts and improving how the system works.
Why?
This update reduces technical complexity and lowers transaction costs by about 15%, making it easier and cheaper for developers to build projects like Spark and Grove on the platform.
What does this mean?
This is positive for SKY. Simplifying the system can attract more decentralized finance (DeFi) projects, increasing usage and revenue. Watch for increased developer activity after this update.
(Source)
3. Staking Rewards Integration (May 29, 2025)
What’s happening?
SKY token holders who stake their tokens now earn rewards in USDS, a stablecoin, based on how well the protocol is doing financially. This replaces the previous fixed-rate rewards.
Why?
Rewards are now linked to real performance metrics like the protocol’s financial health, making incentives more sustainable.
What does this mean?
This is good news for SKY holders. It encourages long-term commitment and aligns rewards with the protocol’s success. Watch how much SKY is staked as a sign of holder confidence.
(Source)
Conclusion
Sky’s recent updates focus on stronger governance, better scalability, and more sustainable rewards. The penalty for delayed upgrades and the new staking rewards system encourage users to support the protocol’s long-term health. Meanwhile, simplifying the core technology could open doors for new DeFi projects.
How will SKY balance short-term penalties with long-term growth in its evolving ecosystem?