Sky is the stablecoin protocol and governance ecosystem formerly known as MakerDAO. Its products include Dai and USDS, tokens designed to track the US dollar through collateral and protocol mechanisms. The project adopted the Sky name in 2024 and introduced USDS and the SKY governance token as part of that transition.12

Collateral and stablecoinsReport an error

The Maker whitepaper describes Dai as a collateral-backed asset created through the protocol rather than a claim on a single issuer's dollar bank account. Vaults record collateral and debt, with risk parameters determining when a position becomes subject to liquidation. USDS represents a collateralised balance in the same core accounting system.1

Sky's USDS documentation specifies an ERC-20 token with an upgradeable implementation and a converter between Dai and USDS. Conversion at a fixed protocol ratio is distinct from a guarantee that either token always trades at one dollar on external markets.31

The liquidation system sells collateral to cover unsafe debt. Its Liquidation 2.0 design uses declining-price auctions with immediate settlement, replacing the earlier arrangement in which bids tied up capital until an auction ended or a bidder was outbid.4

Sky transition and governanceReport an error

The September 2024 launch proposals specified USDS, savings USDS, and SKY, including a Dai–USDS converter and an initial ratio of 24,000 SKY per MKR. These proposals are historical records of the transition, not a statement of every conversion condition today.5

Sky's August 2026 explanation says SKY has replaced MKR for governance and describes a delayed-upgrade penalty affecting late MKR conversions. The technical governance documentation identifies voting, delayed execution, and one-time executable proposals as distinct components. Holders' voting power therefore interacts with contracts that implement the approved changes.26

Sky.money describes the Sky Savings Rate as variable and funded from aggregate protocol surplus. sUSDS represents participation in that savings mechanism; it is not a fixed-rate promise or exposure to one specific collateral position.7

Incidents and risksReport an error

During the March 2020 market crash, network congestion and high gas costs interfered with oracle updates and liquidation bidding. A subsequent Maker governance poll recorded auctions clearing for zero Dai or far below market value, losses to vault holders, and recapitalisation of protocol losses. The poll discussed compensation; its existence alone does not establish that a compensation programme was implemented.8

TimelineReport an error

Date Event
2020-03 Market crash disrupts liquidations8
2024-09-09 Sky token and product launch parameters proposed5
2026-08-18 Sky publishes explanation of completed governance-token transition2

See alsoReport an error

ReferencesReport an error

  1. ^ a b c Maker/Sky. Whitepaper. https://makerdao.com/da/whitepaper/ 

  2. ^ a b c Sky.money (18 August 2026). Understanding the SKY token. https://sky.money/blog/understanding-the-sky-token 

  3. ^ a b Sky Protocol documentation. USDS. https://developers.skyeco.com/protocol/tokens/usds/ 

  4. ^ Sky Protocol documentation. Collateral liquidation. https://developers.skyeco.com/protocol/vaults/collateral-liquidation/ 

  5. ^ a b Maker Governance (9 September 2024). Sky Protocol Launch Season — token and product launch parameter proposal. https://vote.makerdao.com/polling/QmTySKwi 

  6. ^ Sky Protocol documentation. Governance overview. https://developers.skyeco.com/protocol/governance/ovreview/ 

  7. ^ a b Sky.money. Sky Savings Rate and product descriptions. https://sky.money/ 

  8. ^ a b Maker Governance (6 April 2020). Vault compensation poll. https://vote.makerdao.com/polling/QmWC4qey