Sky (formerly MakerDAO)

What is Sky (formerly MakerDAO)?

Sky, formerly MakerDAO, is the DeFi protocol behind the USDS stablecoin (formerly DAI) and the SKY governance token (formerly MKR). MakerDAO rebranded to Sky in 2024 as part of its Endgame plan, upgrading DAI to USDS and converting MKR to SKY at a rate of 1 to 24,000. It remains one of the oldest and largest onchain lending and stablecoin systems, with tokenized real-world assets now driving most of its revenue.

The DAI to USDS migration went live around April 2026, the largest stablecoin conversion in crypto history. USDS sits near $7.9 billion in market cap, and combined USDS plus DAI makes Sky roughly the third largest stablecoin issuer at about $13.4 billion. DAI still exists as a legacy, upgradeable token, so holders who prefer it can keep using it.

The protocol operates through a system of Vaults where users deposit collateral (ETH, WBTC, stETH, and many other assets) to borrow USDS. This overcollateralized model keeps the stablecoin near its $1 peg without relying on bank deposits. When collateral values drop below required levels, positions are liquidated to protect the system. Real-world assets, mainly tokenized US Treasuries, now account for more than 60 percent of protocol revenue, and Sky Savings plus SparkLend are the main places to earn yield.

Key Metrics

How Sky Works

Sky's core mechanism carries over from MakerDAO: users lock collateral in Vaults and can borrow USDS up to a percentage of collateral value. If the collateral value drops too much, the position is liquidated so the stablecoin stays fully backed.

Yield Opportunities with Sky

1. Sky Savings Rate

• Direct deposit: Supply USDS to earn the governance-set savings rate
• sUSDS: Use the wrapped savings token across DeFi
• No Lock-up: Instant deposits and withdrawals

2. Vault Strategies

• Leverage: Borrow USDS, buy more collateral, repeat
• Yield Arbitrage: Borrow USDS at low rates, deploy elsewhere
• Self-Repaying Loans: Use yield-bearing collateral

3. SKY Governance

• Delegate: Participate in protocol governance
• Stars (SubDAOs): Engage with specialized units like Spark under the Endgame structure

Getting Started with Sky

1. Get USDS: Swap or mint via Spark
2. For Yield: Deposit USDS into the Sky Savings Rate
3. For Borrowing: Open a Vault with supported collateral
4. Monitor: Track your positions with Fensory

Risk Considerations

While Sky is among the most established protocols, understand these risks:

• Liquidation Risk: Vault positions can be liquidated if collateral drops
• Governance Risk: SKY holders control key parameters
• Oracle Risk: Collateral prices depend on oracle accuracy
• Smart Contract Risk: Despite extensive audits, risk exists

Frequently Asked Questions

MakerDAO rebranded to Sky in 2024 under its Endgame plan. DAI was upgraded to USDS and MKR converted to SKY at 1 to 24,000. DAI and MKR still exist as legacy, upgradeable tokens, but Sky, USDS, and SKY are the primary brands going forward.

USDS inherits DAI's overcollateralized design, which has held its peg through multiple market cycles since 2017. It is considered one of the most battle-tested stablecoin designs in crypto, though smart contract risk always exists.

It is yield paid to USDS depositors, funded by stability fees and protocol revenue and set by SKY governance. It is the successor to the DAI Savings Rate.

The simplest method is depositing USDS into the Sky Savings Rate through Spark. More advanced users can open Vaults to borrow USDS against collateral for leveraged strategies.

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