What could affect the price of SKY?

The future of SKY depends on changes in governance, the growth of its stablecoin, and overall market conditions.

1. MKR-to-SKY Conversion Penalty (Mixed Impact)
   Starting September 22, 2025, a 1% fee applies to delayed MKR-to-SKY conversions, increasing by 1% every quarter.

2. Stablecoin Growth (Positive Outlook)
   The supply of USDS, Sky’s stablecoin, has grown 29% year-over-year to over $7 billion. Its use on Layer 2 networks like Base and Arbitrum is increasing its value.

3. Token Buybacks (Positive Outlook)
   More than $80 million has been spent buying back over 1 billion SKY tokens (about 3.2% of total supply), reducing the number of tokens available on the market.

In-Depth Analysis

1. MKR-to-SKY Conversion Penalty (Mixed Impact)

Overview:
Sky Protocol requires a 1% penalty fee on MKR-to-SKY token conversions starting September 22, 2025, with the fee increasing by 1% every three months after that. As of October 2025, about 19% of MKR tokens (worth $316 million) have not yet been converted. This penalty is designed to encourage users to upgrade their tokens sooner, but it could also cause some to delay conversions until the last minute, potentially leading to a sudden increase in selling pressure.

What this means:
In the short term, the penalty may encourage holders to convert early, reducing immediate sell pressure. However, if many wait until the penalty becomes too high, there could be a large sell-off later. So far, 81% of MKR holders have converted, showing moderate confidence in SKY’s governance and future.

2. USDS Adoption & DeFi Integration (Positive Outlook)

Overview:
USDS, Sky’s upgraded version of the DAI stablecoin, now has a supply exceeding $7 billion and holds over $3 billion in total value locked (TVL) in its savings program, which offers a 4.5% annual yield. New proposals aim to launch USDH on the Hyperliquid platform, offering a 4.85% yield, and to expand into institutional credit markets through Grove’s $1 billion collateralized loan obligation (CLO) strategy.

What this means:
Growing use of USDS attracts more capital, increasing the protocol’s revenue—over $100 million annually—which is used to buy back SKY tokens. Partnerships like the recent B- credit rating from S&P Global (S&P Global) add credibility and may encourage more institutional investors to participate.

3. Buybacks & Tokenomics (Positive Outlook)

Overview:
Sky’s treasury dedicates 50% of its revenue to buying back SKY tokens daily, averaging $250,000 per day. Since 2025, over 1 billion SKY tokens have been repurchased, totaling more than $80 million spent. This reduces the number of tokens available for sale, helping to support the price.

What this means:
Consistent buybacks help offset negative market trends, such as Bitcoin’s dominance at 59%. However, despite these efforts, SKY’s price is down about 30% year-to-date, indicating weak demand from retail investors.

Conclusion

SKY’s price will likely depend on how well USDS adoption grows, how disciplined holders are in converting MKR tokens, and how effective the buyback program remains. While the protocol’s fundamentals like TVL and revenue look strong, overall market fear and weakness in alternative cryptocurrencies present challenges. Keep an eye on the MKR conversion rate after September 22—will the penalties speed up upgrades or cause price swings?

What are people saying about SKY?

The Sky community is buzzing with updates about tokenomics and exchange listings. Here’s what’s happening:

1. Over 1 billion SKY tokens bought back – a positive move to reduce supply
2. 12.75% staking rewards driving demand for USDS stablecoin
3. Listings on Coinbase and Binance boosting trading activity
4. Penalties for MKR to SKY conversions starting September 18

In-Depth Look

1. Sky Ecosystem Hits Buyback Milestone 🟢

Sky has bought back 1.11 billion SKY tokens, which is about 3.28% of the total supply, spending roughly $1.4 million USDS each week.
(Source: Sky Ecosystem Twitter)
Why it matters: This is a positive sign because buybacks reduce the number of tokens available in the market, which can increase value. The program is funded by the protocol’s revenue, estimated at $230 million annually.

2. Technical Analysis Shows Potential Upside 🟠

A popular crypto analyst spotted a bullish pattern called a “bullish engulfing candle” on SKY’s price chart, suggesting the price could rise to $0.088, which is about 51% higher than the current $0.058.
(Source: mkbijaksana Twitter)
Why it matters: While this pattern indicates potential growth, SKY faces resistance at the 21-day exponential moving average (EMA) price of $0.063, and its price has dropped 30% over the past 90 days. So, the outlook is cautiously neutral.

3. Coinbase and Binance Listings Spark Interest 🟢

SKY/USDS trading pairs are now live on Coinbase apps, with SKY’s market cap at $1.76 billion.
(Source: Coinbase Assets Twitter)
Why it matters: Listings on major exchanges like Coinbase often lead to increased trading volume and liquidity. Historically, assets see about a 50% volume increase after such listings, which can be good for price stability and growth.

4. MKR to SKY Conversion Deadline Approaching 🔴

Starting September 18, a 1% penalty will apply to any MKR tokens not converted to SKY. Currently, 19% of MKR tokens (worth about $323 million) remain unconverted.
(Source: bitbank announcement)
Why it matters: This could create selling pressure as holders rush to convert or sell their MKR tokens before the penalty kicks in, which might negatively impact SKY’s price.

Conclusion

The outlook for SKY is mixed. On one hand, buybacks and attractive staking rewards show strong fundamentals. On the other hand, the pending MKR conversion deadline and a 52% drop in total value locked (TVL) this year suggest caution. Keep an eye on the MKR to SKY conversion rate after September 18 — if the remaining supply is absorbed smoothly, it could confirm the strength of SKY’s updated economic model.

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What is the latest news about SKY?

Sky is making moves to bring its cryptocurrency into the mainstream by working with traditional finance and managing its token supply carefully. Here are the key updates:

1. Valour Launches 100th ETP (October 22, 2025) – Sky’s governance token is now available on Sweden’s Spotlight Stock Market through an exchange-traded product (ETP), making it easier for regulated investors to participate.
2. Binance Supports MKR-to-SKY Migration (October 22, 2025) – Binance is helping users swap Maker (MKR) tokens for Sky (SKY) tokens ahead of upcoming penalties for delayed upgrades.
3. Sky Joins $1.4 Billion Buyback Trend (October 19, 2025) – Sky Protocol repurchased $78.8 million worth of SKY tokens to reduce supply and support the token’s value.

Deep Dive

1. Valour Launches 100th ETP (October 22, 2025)

What happened:
Valour, a company focused on decentralized finance (DeFi) products, introduced its 100th exchange-traded product (ETP) that tracks the value of SKY on Sweden’s Spotlight Stock Market. This product allows traditional investors to gain exposure to SKY without needing to hold or manage the cryptocurrency directly.

Why it matters:
This is good news for SKY because regulated investment products like ETPs attract institutional investors and increase market liquidity. By connecting DeFi with traditional finance, ETPs can help stabilize SKY’s price by broadening demand. (crypto.news)

2. Binance Supports MKR-to-SKY Migration (October 22, 2025)

What happened:
Binance announced full support for swapping Maker (MKR) tokens to Sky (SKY) tokens. This migration is important because it retires the MKR token and consolidates governance under SKY. The swap rate is 1 MKR to 24,000 SKY tokens, and this rate is valid until September 18, 2025, when penalties for not upgrading will start.

Why it matters:
This update is neutral for SKY’s price in the short term. While it confirms SKY’s role as the main governance token, delays in migration could cause some selling pressure. So far, 81% of MKR tokens have been migrated, which may reduce the number of tokens available for sale over time. (Binance Square)

3. Sky Joins $1.4 Billion Buyback Trend (October 19, 2025)

What happened:
Sky Protocol spent $78.8 million in 2025 to buy back SKY tokens from the market. This is part of a larger industry trend where projects are repurchasing tokens worth $1.4 billion to reduce supply and support token value. Sky is buying back about $250,000 worth of tokens daily.

Why it matters:
This is positive for SKY because reducing the number of tokens in circulation can improve the token’s economic health. However, continuing these buybacks depends on the protocol’s revenue, which currently stands at $100 million per year. (MEXC News)

Conclusion

Sky is evolving by combining decentralized finance innovation with traditional financial systems. Its focus on regulated investment products, completing token migrations, and reducing supply through buybacks shows maturity. The big question is whether growing ETP adoption will balance out concerns about token supply as upgrade penalties approach.

What is expected in the development of SKY?

Sky’s roadmap is focused on growing its ecosystem and upgrading its technology. The main goals for late 2024 include:

1. Decentralized Operations Platform – Production (Q4 2024) – Completing a transparent and secure system for managing the network.
2. Atlas Rulebook Editor (Q4 2024) – Building tools to help manage decentralized governance rules easily.
3. Powerhouse Spin-off (Q4 2024) – Making Powerhouse an independent part of the Sky ecosystem.

In-Depth Look

1. Decentralized Operations Platform – Production (Q4 2024)

Overview
This project is nearly finished (92% done as of October 2025) and combines several key components—Fusion, Switchboard, Connect, and Renown—into one transparent platform. It will be rebranded and hosted on Sky’s own web addresses, showing real-time data about the ecosystem.

What this means
This is a positive development for SKY because it improves transparency, which is important for attracting institutional investors and strengthening how the network is governed. The main risk is that technical challenges could delay full integration.

2. Atlas Rulebook Editor (Q4 2024)

Overview
Atlas is halfway done (50% complete) and aims to create a user-friendly document system, similar to Notion, for managing governance rules in a decentralized way. The team is currently analyzing gaps and planning the roadmap for 2025.

What this means
In the short term, this is neutral—it won’t have a big impact right away. But in the long run, it could make it easier for people to participate in governance. Progress is slow (only 10% done on integrated planning), which might delay its usefulness.

3. Powerhouse Spin-off (Q4 2024)

Overview
This effort is about making Powerhouse a separate legal and operational entity within the Sky ecosystem. It’s 39% complete and involves setting up legal structures, designing token economics, and building community support.

What this means
If successful, this is a positive move because it could create new revenue sources for Sky. However, with only 15% of the tokenomics work done, there’s a risk the project might face delays or challenges.

Conclusion

Sky’s roadmap highlights its commitment to decentralization, better governance tools, and scaling its ecosystem. Although progress on key goals for 2024 is slower than expected, finishing these projects could strengthen SKY’s position in the growing decentralized finance (DeFi) space, especially as institutions become more involved. With the MKR-to-SKY migration penalty now in effect (a 1% quarterly decrease), the question remains whether faster development can overcome the challenges posed by this conversion.

What updates are there in the SKY code base?

Sky’s recent software updates focus on improving governance, enhancing staking rewards, and introducing penalties for delayed token migration.

1. Delayed Upgrade Penalty Starts (September 18, 2025) – A 1% fee applies to MKR-to-SKY token swaps, increasing by 1% every three months.
2. Staking Rewards Begin (May 29, 2025) – SKY token holders can earn USDS stablecoin rewards by staking their tokens.
3. Governance Upgrade Completed (May 19, 2025) – Voting power has fully shifted to SKY tokens, replacing MKR.

Detailed Overview

1. Delayed Upgrade Penalty Starts (September 18, 2025)

What’s happening:
Starting September 18, 2025, anyone converting MKR tokens to SKY will pay a 1% penalty fee. This fee will increase by 1% every three months. The goal is to encourage all MKR holders to switch to SKY, which will be the only token used for governance going forward.

Why it matters:
This change helps simplify the system by phasing out MKR tokens. However, it could frustrate holders who delay upgrading, especially smaller investors. The penalty encourages timely action but may create pressure for some users.
(Source)

2. Staking Rewards Begin (May 29, 2025)

What’s happening:
Sky launched a program that rewards SKY token holders who stake their tokens with USDS stablecoins. The rewards offer about a 15% annual return. Within weeks, over $800 million worth of SKY was staked.

Why it matters:
This is positive for SKY because staking reduces the number of tokens available for trading, which can support the token’s value. It also encourages participation in the network. However, since rewards are paid in USDS, the program’s success depends partly on demand for this stablecoin.
(Source)

3. Governance Upgrade Completed (May 19, 2025)

What’s happening:
Sky updated its system so that only SKY tokens have voting power in governance decisions. MKR tokens no longer count for voting. As of September 2025, over 63% of MKR tokens have been converted to SKY.

Why it matters:
This change simplifies governance by focusing voting power on one token, reducing confusion and fragmentation. However, voter participation remains low (only about 0.65% in recent votes), which raises concerns about how decentralized the decision-making really is.
(Source)

Conclusion

Sky’s updates aim to centralize governance around the SKY token and encourage staking through rewards, while using penalties to phase out the older MKR token. With about 36.75% of MKR still unconverted, the key question is: Will the penalty system successfully retire MKR without hurting SKY’s liquidity and overall stability?