Sky | Trading Non Stop

What is SKY?

Sky (SKY) is a decentralized finance (DeFi) platform that evolved from MakerDAO, offering improved governance and stablecoin tools. It enables users to earn savings, receive rewards, and supports growth within its ecosystem—all without giving up control of their funds.

SKY is the governance token for the Sky Protocol, replacing MakerDAO’s MKR token.
It powers the USDS stablecoin (an upgraded version of DAI) and features like savings rates.
Built on Ethereum with a flexible design that supports expansion to Layer 2 networks for faster and cheaper transactions.

Deep Dive

1. Purpose & Value Proposition

In 2024, MakerDAO rebranded as Sky Protocol to make governance simpler and help more people use DeFi. It addresses challenges in decentralized decision-making and stablecoin use by introducing:

USDS: A stablecoin pegged 1:1 to the U.S. dollar, upgraded from DAI, that offers users the chance to earn interest through the Sky Savings Rate (SSR).
SKY: The only governance token that lets holders vote on protocol upgrades, manage risks, and receive rewards.

Importantly, users keep full control of their funds in their own wallets, even while earning interest or voting on governance.

2. Technology & Ecosystem

Modular Design: Sky Protocol runs on Ethereum but connects to Layer 2 networks like Arbitrum and Optimism through SkyLink. This setup allows for faster and less expensive transactions.
Sky Stars: These are independent projects within the Sky ecosystem, such as Spark, a lending platform. They innovate while following Sky’s governance rules.
Staking Engine: This new system replaced MakerDAO’s older model, allowing SKY holders to stake tokens to earn rewards, delegate voting power, or borrow USDS stablecoins.

3. Tokenomics & Governance

Supply Mechanics: SKY replaced MKR tokens at a ratio of 1:24,000, making it easier for smaller investors to participate.
Buybacks: The protocol uses its revenue to buy back SKY tokens weekly, reducing the total supply. As of August 2025, over 1.1 billion SKY tokens have been bought back.
Sky Atlas: This is the set of rules that govern decentralized voting. The community updates it through proposals, voting on things like savings rates and how the treasury is managed.

Conclusion

Sky builds on MakerDAO’s foundation with a focus on scalable governance, easy-to-use yield features, and ecosystem growth through a modular design. Its USDS stablecoin and SKY token work together to create a system where governance participation directly supports the protocol’s development.

Looking ahead, how will Sky’s Star projects like Spark influence the future of decentralized lending and the adoption of DeFi by institutions?