What Sky does
Sky is the rebrand of MakerDAO, completed in 2024 as part of founder Rune Christensen's Endgame plan to restructure the protocol's governance and product line-up. MKR holders could convert their tokens to SKY at a fixed rate of 1 MKR to 24,000 SKY, and the long-running DAI stablecoin was joined by a new token, USDS, intended as DAI's forward-looking successor while DAI itself continues to exist as a legacy asset.
The protocol's core business hasn't changed: Sky mints its stablecoin against overcollateralised crypto and real-world asset collateral, including large allocations to short-term US Treasuries and tokenised bonds — a strategy Maker pioneered years before real-world assets became a mainstream DeFi narrative. Depositors can earn yield on USDS through the Sky Savings Rate, successor to Maker's old DAI Savings Rate.
Sky's governance structure introduces 'Stars' — semi-independent SubDAOs operating under the overarching Sky Atlas framework, with Spark, a lending protocol, as the most prominent example, designed to let parts of the ecosystem innovate and take on risk somewhat independently of the core protocol.
Risks worth knowing
Governance centralisation is a recurring criticism: Rune Christensen retains outsized influence over Sky's direction, and several of his more aggressive tokenomics and farming proposals have split the community. The heavy tilt toward real-world asset collateral means Sky's stability now depends significantly on traditional finance counterparties and custodians, introducing legal, custodial and regulatory risks a purely crypto-collateralised system wouldn't carry.
The DAI-to-USDS and MKR-to-SKY transition has also created lingering confusion, with both legacy and new tokens circulating simultaneously, and users need to be clear on which asset they're actually holding and what rate they're converting at before assuming the two are interchangeable.