What could affect the price of SKY?

SKY’s future depends on changes in its token system, the adoption of real-world assets (RWAs), and overall trends in decentralized finance (DeFi).

1. MKR to SKY Migration Penalties – Starting in 2026, fees on converting MKR tokens to SKY could reduce the total supply.
2. $2.5 Billion RWA Initiative via Keel – A project on the Solana blockchain aims to increase the use of USDS and SKY tokens.
3. Buyback Activity – Over 1 billion SKY tokens have been burned since 2025, reducing the number of tokens in circulation.

In-Depth Analysis

1. Changes in Tokenomics & Migration (Positive Outlook)

Summary:
Beginning January 2026, converting MKR tokens to SKY will incur a 1% fee, which will increase every quarter (Coinbase). More than 81% of MKR tokens have already been converted, but $323 million worth remain. SKY’s buyback program has removed 3.28% of the total token supply by using revenue from the protocol.

What this means:
These penalties may encourage holders to convert their MKR tokens sooner, potentially reducing the available SKY supply and increasing scarcity. The buyback program, which spends about $250,000 daily, helps absorb selling pressure. Additionally, a new staking feature called Activation staking, launching in early 2026, could lock up tokens and reward holders, further limiting supply.

2. Expansion into Real-World Assets (Mixed Outlook)

Summary:
Sky’s Keel project has committed $2.5 billion to tokenizing real-world assets on the Solana blockchain (Coindesk). However, Aave, a major DeFi platform, recently removed USDS as acceptable collateral, raising concerns about its risk.

What this means:
If successful, this initiative could increase the use of USDS, which is important for SKY’s governance and utility. However, relying on Solana introduces risks specific to that blockchain. Also, regulatory rules around tokenized real-world assets are still evolving, which could impact growth.

3. Market Sentiment & Stablecoin Competition (Potential Challenges)

Summary:
The crypto market is currently in “Extreme Fear,” with the Fear & Greed Index at 26, reducing demand for alternative cryptocurrencies. USDS faces strong competition from USDC and USDT, which together dominate 90% of the $130 billion stablecoin market.

What this means:
Since SKY’s value is tied to the growth of USDS, it is vulnerable to shifts in the stablecoin market. A positive market turnaround could benefit SKY, but ongoing cautious sentiment might slow down investment in DeFi projects.

Conclusion

SKY’s medium-term success depends on smoothly phasing out MKR tokens and growing real-world asset adoption to counterbalance challenges from stablecoin competition. The token shows strength with a recent 9.55% weekly price increase, but resistance at the 200-day moving average of $0.069 remains. Keep an eye on the SKY/USDS buyback and burn rates after the migration penalties start in January 2026—this could trigger a significant supply reduction.

What are people saying about SKY?

The Sky (SKY) community is divided between excitement about buybacks and concerns about its AI plans. Here’s the latest:

1. Buybacks boost positive outlook – $1.9 million spent last week.
2. AI strategy faces doubts – competition and liquidity issues are concerns.
3. Big push into real-world assets (RWA) – $500 million Solana project draws attention.

In-Depth Look

1. @kryptotalker: Buybacks and Institutional Focus (Positive)

“Sky Protocol bought back 40.5 million SKY tokens for $1.9 million USDS… aiming for institutional-level decentralized finance with $2.5 billion in stable reserves.”
– @kryptotalker (7.3K followers · 28.9K likes · Nov 29, 2025)
See original post
What this means: Ongoing buybacks (over 1.12 billion SKY tokens removed from circulation so far) reduce supply, while shifting toward institutional DeFi could help stabilize demand for USDS stablecoins.

2. @Nicat053nn: Challenges with AI Computing (Negative)

“SKY is losing momentum… weak liquidity and broad selling pressure in the sector are dominant.”
– @Nicat053nn (9.2K followers · 1 like · Dec 1, 2025)
See original post
What this means: SKY’s AI-compute plans face stiff competition from projects like RNDR and TAO. A 40% drop in weekly trading volume suggests traders are less confident in the short term.

3. @SkyEcosystem: $500 Million Real-World Asset Initiative (Positive)

Keel, Sky’s investment arm, launched a $500 million “Tokenization Regatta” to bring real-world assets (RWAs) onto the Solana blockchain.
– @SkyEcosystem (294K followers · Dec 12, 2025 via CoinDesk)
What this means: Sky’s move into RWAs could increase demand for USDS and SKY staking, using Solana’s fast network to attract institutional investors.

Conclusion

The outlook for SKY is mixed. Aggressive token buybacks and the $500 million Solana RWA project show strong long-term confidence. However, challenges in the AI sector and the need to break through the $0.05 price resistance are key hurdles. Keep an eye on SKY’s trading volume and RWA adoption in early 2026 for clearer signs of direction.

What is the latest news about SKY?

Sky is making strategic moves to grow and improve its platform, focusing on expanding into institutional decentralized finance (DeFi) and upgrading its token system. Here are the key updates:

1. Tokenization Regatta Launch (December 12, 2025) – A $500 million project to boost real-world asset (RWA) tokenization on Solana.
2. Coinbase MKR→SKY Migration Support (December 10, 2025) – Coinbase will automatically swap MKR tokens to SKY starting January 2026.
3. Buybacks & Institutional Shift (November 29, 2025) – Sky bought back $1.9 million worth of SKY tokens as it shifts focus toward institutional DeFi.

Deep Dive

1. Tokenization Regatta Launch (December 12, 2025)

Overview:
Sky’s Keel project announced a $500 million “Tokenization Regatta” at the Solana Breakpoint event. This initiative aims to make it easier for institutions to tokenize real-world assets—like real estate or commodities—on the Solana blockchain. The plan is to grow this program to $2.5 billion over several years, with more than 40 institutions already interested.

What this means:
This is a positive development for SKY because it positions Sky as a leader in bringing real-world assets into the blockchain space. This could increase demand for USDS, Sky’s stablecoin, and create new revenue opportunities on Solana. Since these assets generate yield, it could also boost earnings for those who stake SKY tokens.
(CoinMarketCap)

2. Coinbase MKR→SKY Migration Support (December 10, 2025)

Overview:
Coinbase announced it will support the migration from MKR tokens to SKY tokens between January 12 and 14, 2026. Users holding MKR on Coinbase will have their tokens automatically swapped to SKY. After this period, any MKR tokens not converted may face penalties, encouraging users to upgrade on time.

What this means:
This makes the migration easier for everyday users and reduces the chance of a sudden sell-off caused by delayed conversions. However, there is still about $323 million worth of MKR tokens unconverted as of September 2025, which could cause price swings if many holders rush to exit after penalties start.
(CoinMarketCap)

3. Buybacks & Institutional Shift (November 29, 2025)

Overview:
Sky Protocol repurchased 40.5 million SKY tokens, worth about $1.9 million, in late November. This is part of a larger buyback program that has retired 1.1 billion SKY tokens (around 3.2% of the total supply) so far this year. At the same time, Sky is shifting its focus toward institutional DeFi by investing $2.5 billion in stablecoin reserves into yield-generating real-world assets.

What this means:
Buybacks show that Sky is confident in the long-term value of SKY tokens. The move toward institutional DeFi helps diversify revenue beyond just retail lending. However, investing in real-world assets carries regulatory and counterparty risks, which could affect the stability of USDS if the expected yields don’t materialize.
(Kryptotalker)

Conclusion

Sky is focusing heavily on real-world assets and institutional adoption while improving its token economics through buybacks and migration deadlines. The $500 million initiative on Solana and Coinbase’s support for token migration show Sky’s goal to connect traditional finance with decentralized finance. The big question is whether Sky’s bet on real-world assets can balance out the risks from the MKR token migration and keep up its recent strong price gains.

What is expected in the development of SKY?

Sky’s roadmap is centered on improving governance, growing its ecosystem, and increasing adoption by institutions.

1. Delayed Upgrade Penalty Increases (December 2025)
2. Powerhouse Spin-Off (Q4 2025)
3. Atlas Rulebook Completion (Q4 2025)
4. Coinbase Migration Support (January 2026)
5. Core Simplification Plan (Under Discussion)

In-Depth Overview

1. Delayed Upgrade Penalty Increases (December 2025)

What’s happening:
Starting September 18, 2025, users who hold MKR tokens and want to upgrade to SKY face a 1% penalty. This penalty will increase by 1% every three months. The goal is to encourage MKR holders to switch to SKY sooner to avoid higher fees (Sky Protocol Docs).

Why it matters:

• Positive: This speeds up the transition to SKY, reducing the number of old MKR tokens in circulation and potentially lowering selling pressure.
• Potential downside: Some users might resist or delay due to technical issues or dissatisfaction with the penalties.

2. Powerhouse Spin-Off (Q4 2025)

What’s happening:
Powerhouse, Sky’s decentralized operations platform, is becoming its own independent entity. This involves setting up a legal structure, designing its token system, and bringing in outside clients (Sky Fusion Roadmap).

Why it matters:

• Positive: This move could create new revenue by offering infrastructure services to other decentralized finance (DeFi) projects.
• Potential downside: Success depends on clear regulations and attracting users outside the Sky network.

3. Atlas Rulebook Completion (Q4 2025)

What’s happening:
The Atlas Rulebook is a set of governance guidelines being integrated into Sky Connect. It helps standardize how decisions are made within the ecosystem, including projects like Spark and Grove (Sky Fusion).

Why it matters:

• Positive: Improves transparency and consistency in governance.
• Neutral: Could slow down decision-making because of added procedures.

4. Coinbase Migration Support (January 2026)

What’s happening:
From January 12 to 14, 2026, Coinbase will automatically convert MKR tokens held by users into SKY tokens. After this, SKY will be available for trading on Coinbase (CoinMarketCap).

Why it matters:

• Positive: This is expected to increase SKY’s liquidity and make it easier for everyday investors to buy and sell, similar to the “Coinbase Effect” seen with other tokens.

5. Core Simplification Plan (Under Discussion)

What’s happening:
There’s a proposal to simplify Sky’s governance structure to make it easier and faster to support ecosystem projects like Spark and Grove (SkyEcosystem tweet).

Why it matters:

• Positive: Could speed up funding and development for promising projects.
• Potential downside: Simplifying too much might weaken important governance controls.

Summary

Sky’s roadmap focuses on making governance more efficient, expanding its ecosystem, and improving market access. These efforts could strengthen SKY’s position in decentralized finance (DeFi), but there are risks related to execution and adoption.

Key points to watch: Will the Powerhouse spin-off attract new clients? How will the penalties on delayed MKR upgrades affect SKY’s circulating supply?

What updates are there in the SKY code base?

Sky’s platform has improved through key updates like activating staking rewards, adding penalties for delayed upgrades, and simplifying its core system.

1. Staking Engine Activation (May 29, 2025) – Started giving USDS rewards to SKY holders who stake their tokens, encouraging more participation.
2. Delayed Upgrade Penalty (September 18, 2025) – Added penalties to motivate MKR holders to switch to SKY faster.
3. Core Simplification Proposal (July 24, 2025) – Made the system simpler to help the ecosystem grow faster.

Deep Dive

1. Staking Engine Activation (May 29, 2025)

Overview: Sky introduced USDS rewards for people who stake their SKY tokens, offering about a 16% yearly return. Within weeks, over 947 million SKY tokens (worth around $77 million) were staked.
This update added smart contracts that pay rewards directly from the platform’s revenue, so stakers earn based on Sky’s financial success. Users keep control of their staked tokens while earning rewards.

What this means: This is good news for SKY because it encourages people to hold their tokens longer and ties their rewards to how well Sky performs, which could reduce selling pressure. (Source)

2. Delayed Upgrade Penalty (September 18, 2025)

Overview: MKR token holders who delay converting to SKY now face a 1% penalty, which increases by 1% every three months.
This penalty is built into the governance system to phase out MKR tokens and simplify how the platform works. By September, over 63% of MKR had already been converted, according to Sky’s dashboard.

What this means: This is neutral for SKY overall. It speeds up the unification of governance but might upset some MKR holders who haven’t switched yet. The goal is to complete Sky’s move away from MakerDAO’s older systems. (Source)

3. Core Simplification Proposal (July 24, 2025)

Overview: Sky proposed cutting down on unnecessary parts of the system to focus on scaling “Stars,” which are smaller sub-ecosystems like Spark and Grove.
The plan includes removing outdated modules and making governance voting more efficient. If approved, this would move Sky toward a more modular, app-chain style design.

What this means: This is positive for SKY because a simpler core can attract more developers and institutions, increasing demand for both USDS and SKY tokens. (Source)

Conclusion

Sky’s recent updates show a clear focus on sustainable governance and growth in institutional decentralized finance (DeFi). The staking rewards and penalty system help tighten the token economy, while simplifying the core could unlock better scalability. With 63% of MKR already converted, the key question is how Sky will balance supporting legacy users while expanding its new ecosystem.

Why did the price of SKY go up?

Sky (SKY) increased by 2.13% in the last 24 hours, outperforming its 7-day gain of 8.7% and 30-day gain of 6.7%. The main factors behind this growth are:

1. Institutional Real-World Asset (RWA) Expansion – Keel’s $500 million initiative on Solana to tokenize real-world assets is boosting the ecosystem.
2. Supply Reduction – The protocol has bought back 1.1 billion SKY tokens (about 3.28% of total supply), reducing available tokens and tightening liquidity.
3. Technical Breakout – SKY’s price moved above important moving averages, indicating positive momentum.

Deep Dive

1. Real-World Asset Momentum (Positive Outlook)

Overview:
Keel, part of the Sky ecosystem, launched a $500 million “Tokenization Regatta” at the Solana Breakpoint event. This program aims to attract institutional projects to tokenize assets like real estate and credit. More than 40 institutions are interested, with plans to grow the program to $2.5 billion (CoinDesk).

What this means:

• Demand for SKY is likely to increase since it’s the governance token for the Sky Protocol, which manages stablecoin reserves and integrates real-world assets.
• Solana’s fast blockchain technology could help Sky’s USDS stablecoin gain wider use, increasing protocol revenue and rewards for token holders who stake their SKY.

What to watch:

• Updates on how these real-world asset projects develop and growth in total value locked (TVL) during the first quarter of 2026.

2. Buyback-Driven Scarcity (Positive Outlook)

Overview:
Last week, Sky Protocol used 1.39 million USDS to buy back 16.55 million SKY tokens. So far, total buybacks have reached 1.11 billion SKY tokens (around $80 million). These buybacks are funded by the protocol’s revenue and help reduce inflation.

What this means:

• Fewer tokens in circulation can help stabilize or increase the price.
• Shows financial discipline and supports Sky’s shift toward a deflationary token model after the MakerDAO rebranding.

Key metric:

• The protocol buys back about $250,000 worth of SKY daily, with 3.28% of the total supply already removed from circulation.

3. Technical Strength (Mixed Signals)

Overview:
SKY’s current price ($0.0577) is above its 7-day simple moving average ($0.0545) and 30-day exponential moving average ($0.0531). The MACD indicator shows bullish momentum (+0.00064), but the RSI (Relative Strength Index) at 67.83 is close to overbought levels.

What this means:

• Short-term momentum favors buyers, but the high RSI suggests the price might consolidate or pull back soon.
• If the price stays above the Fibonacci 23.6% retracement level ($0.0551), it could aim for $0.0594, the recent high.

Key level:

• Falling below $0.0551 might lead to some profit-taking by traders.

Conclusion

Sky’s recent 24-hour price increase reflects strong institutional interest in real-world assets, disciplined token buybacks, and positive technical signals. Even though the overall crypto market sentiment remains cautious (Fear & Greed Index at 26), SKY’s fundamentals are showing strength independent of broader trends.

What to watch: Will Keel’s Solana-based real-world asset projects continue to bring institutional investors into the Sky ecosystem? Keep an eye on SKY’s total value locked (TVL) and USDS stablecoin adoption for signs of sustained growth.