SKY is the next-generation version and brand name of MakerDAO, a leading project in the world of decentralized finance (DeFi). SKY can be thought of as the second season of MakerDAO, one of the first major experiments in decentralized finance. The infrastructure, community, and risk management experience MakerDAO has accumulated over the years is being reshaped under the name Sky, a transformation plan called Endgame, highlighting a simpler interface (Sky.money), a more complete ecosystem, and a design suited for growth. In this new structure, the legacy stablecoin DAI is giving way to USDS, while the governance token MKR is being replaced by the SKY token, making the system both technically revamped and more accessible to the wider public. Now, let's examine what exactly SKY offers and where USDS and the SKY token fit into this narrative.
SKY's Definition and Origins
SKY stands out as a protocol that picks up where MakerDAO left off, making decentralized lending and stablecoin infrastructure more modern and accessible. The idea of a collateralized, smart-contract-powered stablecoin, introduced years ago by MakerDAO, is being reimagined under the SKY umbrella with new tokens and more user-friendly tools. MakerDAO founder Rune Christensen is driving this transformation, and the Endgame strategy, designed to accelerate the platform's growth and transition to a more resilient structure, is driving this change.
The SKY project's emergence is shaped by the Endgame Plan, adopted by the MakerDAO community in 2022. The goal is to both technically simplify the system and establish a more robust model for long-term growth. In August 2024, MakerDAO officially transitions to the SKY brand and introduces the ecosystem's new tokens, SKY and USDS. During this process, DAI holders are given the opportunity to switch to USDS at a 1:1 ratio. MKR holders are given the option to receive 24,000 SKY for every 1 MKR they purchase. Switching is not mandatory, but users entering the new ecosystem gain access to additional benefits like Sky Savings Rate (SSR) and Sky Token Rewards (STR).
At the heart of SKY is the goal of making MakerDAO's long-standing decentralized stablecoin model more accessible. Through the Sky.money interface, users connect to the ecosystem without the need for any intermediaries, creating their own stablecoins, participating in savings modules, and voting in governance processes. All of this maintains the decentralized nature inherent in MakerDAO's DNA while making DeFi more accessible and accessible to a wider audience.
SKY's History: Key Milestones
From the first steps taken in 2015 to the whitepaper published in 2017, from the Multi-Collateral DAI update in 2019 to the major rebranding in 2024, each phase has led to Sky's current form. Let's take a step-by-step look at this journey.
2015: Project Inception: SKY's roots lie in 2015, when Rune Christensen proposed the idea of MakerDAO. The idea of creating a collateralized stablecoin running on Ethereum was first shared with the community; the MKR token was launched that same year. This first step laid the foundation for a fully user-managed DAO structure and paved the way for a growing ecosystem.
2017: Whitepaper and First Stablecoin: In December 2017, MakerDAO's first official whitepaper was published, and the Single-Collateral Dai (SCD) system was introduced. In this system, only ETH is accepted as collateral, and the first DAI is generated in return. DAI's transparent and decentralized operation, entirely through smart contracts, represents a major innovation for the crypto ecosystem of the time and opens a new chapter in the stablecoin field.
2019: Multi-Collateral DAI and DSR: In November 2019, the system received a significant update: Multi-Collateral Dai (MCD). Now, not only ETH but also many ERC-20 assets, especially BAT, are accepted as collateral. This expansion increases DAI's usability and diversifies risk. The same update introduces a savings mode called the Dai Savings Rate (DSR); users can earn the interest offered by the protocol by holding DAI. This makes DAI not just a stablecoin but also a savings tool.
2024: USDS Launch and Transition to Sky: The Endgame plan, which the MakerDAO community began working on years ago, is undergoing a major transformation in 2024. On August 27, 2024, the MakerDAO brand officially transitions to Sky, revamping the protocol's identity, interface, and token economy. During this process, the new USDS stablecoin is introduced alongside DAI, and the SKY token is introduced instead of MKR. Users can convert DAI 1:1 to USDS and MKR to SKY at a 1:24,000 ratio in a single transaction. This completes the transition from the MakerDAO era to the Sky ecosystem, both technically and from a community perspective.
2025: As of November 2025, the SKY price is trading around $0.50.
Why is SKY Important?
The SKY protocol holds a strong position in the DeFi ecosystem thanks to several key features. Both its technical infrastructure and governance model distinguish it from other decentralized lending and stablecoin systems.
Decentralized Structure
SKY offers a platform powered entirely by smart contracts, independent of any central authority. Users connect directly to the protocol with their own wallets; the Sky.money interface acts as a gateway and does not hold any funds. This structure creates a financial layer that is censorship-resistant and accessible to everyone. Decisions are made through community votes, and all transactions are publicly visible on-chain, increasing trust.
Collateral Diversity
SKY's stablecoin structure is built on a wide variety of collateral, not tied to a single asset. While only ETH was accepted in the early years, BAT, USDC, WBTC, and some tokenized commodities have been added to the collateral pool over time. This spreads risk even in volatile markets and enhances the stability of the USDS/DAI value. Additionally, thanks to the Peg Stability Module, low-slippage 1:1 swaps with assets like USDC are available, and the price of stablecoins remains around the target level of $1.
DSR and SSR Mechanisms
The SKY ecosystem offers stablecoin users savings products that can generate passive income. The Dai Savings Rate (DSR), originating from the MakerDAO era, is known as a structure that earns interest for DAI holders. With SKY, this mechanism expands, and the Sky Savings Rate (SSR) is introduced. With SSR, USDS holders can earn additional USDS by depositing their tokens into the savings module. There is no minimum limit; users can withdraw from savings at any time. This flexibility makes the protocol an attractive option for both beginners and experienced DeFi users.
Integration with Real World Assets (RWA)
One of the key elements of SKY is its integration with RWA. The protocol generates income by allocating a portion of its reserves to low-risk financial instruments like US Treasury bonds. This approach allows users to benefit from the secure returns offered by traditional finance in addition to the inherent returns of DeFi. Furthermore, accessing this system doesn't require a bank account or specific regional financial infrastructure; a wallet is sufficient. This allows users anywhere in the world to indirectly benefit from US Treasury bond yields. This significantly strengthens the financial inclusion offered by DeFi.
Strong Risk Management and Security
The SKY protocol operates on the principle of over-collateralization. Each USDS is backed by an asset exceeding its value. If the collateral value falls below predetermined thresholds, the system automatically activates; the collateral is sold through an auction process to settle the debt. This mechanism maintains the stablecoin's stability. Furthermore, the community constantly evaluates the risk parameters set for each collateral type. Collateral ratios, debt ceilings, and the collateral acceptance list are updated through community votes. This dynamic approach allows the protocol to quickly adapt to market conditions.
DAO Governance and Community
Another factor that enhances the importance of SKY is its complete community governance. SKY token holders determine everything from new collateral types, fee rates, upgrades, and strategic decisions through on-chain votes. The Sky Atlas, which serves as a guide for the system, is also regularly updated by the community. This means the protocol is not subject to the control of a central person or organization; It is shaped by the collective decisions of its user base. This model is one of the cornerstones that supports both transparency and long-term sustainability. The latest proposals and votes on the protocol are as follows:
SKY Token Economics
The SKY token was designed as a next-generation governance and utility token, replacing MakerDAO's MKR token. During the MKR to SKY transition, the supply was rescaled at a 1:24,000 ratio, dividing the total potential supply by approximately 24 billion units. This structure makes governance more accessible; many more users can acquire small amounts of SKY and exercise voting rights. While the circulating supply is in the billions, the token remains accessible because SKY's price is trading within a few cents. Currently, its market capitalization is hovering around $1–2 billion. Because MakerDAO/SKY is a revenue-generating protocol, its P/E ratio offers a valuation similar to traditional finance; as the platform's RWA revenues and stability fees increase, SKY's economic model becomes more robust.
The MKR-SKY exchange is listed on the SKY website as follows.
The SKY token also functions as the protocol's insurance layer. If a large collateral shortfall occurs, new SKY tokens can be minted to cover the shortfall; this mechanism helps stablecoins remain fully collateralized. Furthermore, when the protocol generates excess revenue, the community is discussing periodic burn mechanisms, which further bolster SKY's long-term value.
SKY's Use Cases
At the heart of the SKY ecosystem is stablecoin production, which operates on a collateralized borrowing principle. Users lock ETH and other supported assets in vaults as collateral and borrow DAI or USDS in return. The system operates with overcollateralization, meaning the vault always holds more assets than the loan. Arbitrage opportunities and the Peg Stability Module (PSM) come into play to maintain the Peg target, which is 1 DAI/USDS ≈ 1 USD. Offering a near-1:1 swap with other stablecoins like USDC, price deviations are quickly offset. On the savings side, the Dai Savings Rate (DSR), first developed for DAI, and then the Sky Savings Rate (SSR) for USDS stand out. When users deposit DAI or USDS into the relevant savings module, they earn an interest-like return. On the SSR side, this process works through sUSDS; when users deposit USDS, they receive sUSDS, and over time, the value of sUSDS increases as new USDS are added to the pool. These returns are fueled by stability fees from vaults, interest income from lending protocols like Spark, returns from RWA investments, and other DeFi integrations. This means it has a multi-legged revenue model that doesn't rely on a single source.
RWA integration is a key differentiator for SKY. The protocol generates regular interest income by directing a significant portion of its stablecoins into US Treasury bonds, corporate loans, or similar low-risk instruments. This allows it to offer attractive rates on products like DSR/SSR, allowing users to share in the returns of traditional finance with just one wallet. RWAs are also included as collateral within the Vault system; it becomes possible to generate DAI/USDS by using tokenized invoices, bonds, or other assets as collateral. This strengthens the bridge between DeFi and the real economy.
Risk management operates entirely on-chain. Parameters such as collateral ratios, liquidation thresholds, debt ceilings, and stability fees for each collateral type are determined through governance. Vaults whose collateral value falls below a critical level are automatically liquidated; the debt is paid off through an auction mechanism, preventing the system from going into debt. The diversity of the collateral basket (ETH, USDC, WBTC, RWA, etc.) reduces dependence on a single asset; the share of risky assets can be reduced or their limits lowered over time through community votes.
SKY's Future and Roadmap
SKY's roadmap is also quite dynamic. As part of its Endgame plan, it aims to evolve from a single protocol to a multi-segmented, modular ecosystem. Sky Stars is at the center of this vision; Early examples like Spark offer independent yet SKY-compatible sub-protocols focusing on different areas (credit, liquidity, and perhaps in the future, DEX, insurance, gaming finance, etc.). Each Star has its own treasury, incentives, and governance, enabling rapid experimentation in the environment without compromising the core protocol. The roadmap includes the gradual implementation of multiple Stars with different roles (liquidity management, core service provision, etc.).
Another element fueling this structure is the Sky Allocation System. The goal is to automatically and intelligently allocate the ecosystem's capital to the most efficient locations. The Allocation System is designed to function like a "decentralized central bank," providing USDS liquidity to Stars projects or strategic modules. The Spark Liquidity Layer is one of the first examples of issuing USDS based on collateral in the main vault and then transferring it to opportunities on different chains. In the medium to long term, the amount each Star can borrow, the repayment terms, and risk limits are recorded in Sky Atlas and shaped by governance. Thus, funds in the treasury are flowing into revenue-generating areas rather than remaining idle.
RWA also has an aggressive growth plan. Positions based on real-world assets, currently totaling billions of dollars, are expected to expand in both variety and scale in the coming years. Bonds, corporate loans, and new tokenized asset types (e.g., stocks, commodities, fund shares, etc.) have the potential to further enrich the collateral structure. This allows the USDS supply to grow not only by relying on crypto collateral but also on cash flows linked to the real economy, creating a more robust foundation for stablecoin adoption.
On the governance and security front, the process isn't stopping; on the contrary, it's becoming more layered. Modernizing voting modules, implementing AI-powered governance tools, and incentivizing active voting through lockstake and reward mechanisms are among the plan's components. In the long term, both Stars and the main protocol components will undergo regular audits, and transparent reporting of reserves and RWA positions is a priority. Meanwhile, with SkyLink and similar bridge solutions, USDS and SKY are expected to operate seamlessly across multiple chains (Ethereum, L2s, and other ecosystems). In the future, the option of migrating to a completely new chain is on the table; however, for now, multi-chain expansion is the primary strategy for Sky to reach a broader user base.
SKY's Developers and Leadership
The team behind the SKY protocol draws from the deep roots of MakerDAO. Rune Christensen, the project's founder, is the primary architect of the SKY ecosystem, having paved the way for MakerDAO. As the first to bring the decentralized stablecoin idea to life, he is now carrying this vision to a more modern and sustainable model within the Sky Ecosystem. Former Maker Foundation members, long-time independent developers, and the global MakerDAO community are working together throughout the development process.
In MakerDAO's early years, the Maker Foundation was known as the guiding body for the project; however, in 2020, full control was transferred to the community and the foundation was shut down. This complete transition forms the basis of the governance model known today as SKY Governance. SKY Governance operates through a completely on-chain voting structure, involving individuals and institutions spread across the globe. Every SKY token holder has a say in decisions about the protocol's future and influences changes in their voting power.
The SKY ecosystem's leadership approach is centered on a flexible and multi-unit structure. Subprojects, originally conceived as "SubDAOs" during the MakerDAO era, are now rebranded as Sky Stars under SKY. Sky Stars offers a modular structure comprised of autonomous projects with their own decision-making mechanisms, treasury, and goals. The first and most well-known example of these projects is Spark Protocol. Spark is a lending and borrowing platform built on the Aave infrastructure, building on MakerDAO's experience in lending markets and optimized specifically for the Sky ecosystem's stablecoins. The Spark team is gaining significant innovation momentum with the Tokenization Grand Prix program, launched in the summer of 2024, aiming to attract $1 billion worth of real-world assets to the protocol.
Frequently Asked Questions (FAQ)
Below are some frequently asked questions and answers about SKY:
Is SKY the same as MakerDAO?: Yes. SKY is a revamped version of MakerDAO as part of the Endgame plan. The branding was changed in 2024, with the DAI → USDS to MKR → SKY transformation. The technology, team, and vision were preserved, but a more modern governance model and new tools were added.
How do stablecoins (DAI and USDS) maintain their value?: The system operates with overcollateralization; for every 1 USDS/DAI, a higher value of collateral is held in the vault. The PSM module is activated when price fluctuations occur, enabling low-loss swaps with stablecoins like USDC. Thanks to arbitrage, liquidations, and collateral structure, stablecoins remain close to $1.
What is the SKY token used for?: SKY is the protocol's management key. The community votes with SKY on all critical decisions, from interest rates to collateral types. Furthermore, mechanisms such as burning are being discussed when the system generates excess income. Some reward programs (STR, staking incentives, etc.) also provide advantages to SKY holders. Additionally, if a large collateral gap occurs, SKY is minted and used as system insurance.
What's the difference between USDS and DAI?: DAI is the old stablecoin; USDS is the new, upgraded version. Both operate with a target of $1. USDS comes with new incentives (SSR) and a more modern collateral structure. DAI to USDS conversion is 1:1. USDS is planned to become the primary stablecoin in the medium to long term.
What is RWA and why is it important?: RWA is the tokenization of real assets such as bonds, loans, and real estate. The SKY protocol uses these assets as collateral or investment instruments. This allows the protocol to generate regular and stable income, which can be passed on to users through SSR/DSR. RWA makes stablecoins more robust. How does the Sky Vault system work?: Vault is a smart contract vault where you can lock up collateral and borrow USDS/DAI. For example, you can deposit ETH and mint USDS up to a certain amount. Your collateral is released when you repay the loan. If the collateral value decreases, automatic liquidation is activated. The logic is similar to the CDP system on MakerDAO.
Who can use SKY?: Anyone with an internet connection. The protocol is permissionless; all you need is a crypto wallet. Regional restrictions may apply only to some reward/incentive modules, but the core protocol (vaults and stablecoin transactions) is accessible globally.
You can find the latest analysis, tools, and integration guides on SKY and decentralized stablecoins in the JR Kripto Guide series.
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