Coin columns · Ethereum City (Capital)
Sky (SKY): The Rebranded MakerDAO and Its USDS Stablecoin
From DAI’s creator to Sky: how USDS and SKY work
Sky is the name that MakerDAO, creator of the pioneering decentralised stablecoin DAI, adopted in 2024. SKY is the protocol’s governance (voting) token and the successor to MKR.
1. From MakerDAO to Sky
MakerDAO was started around 2015 by the Dane Rune Christensen. In December 2017 it launched DAI, a dollar-pegged coin borrowed against ether locked as collateral and run by smart contracts instead of a bank; because users mint it themselves against collateral, it differs from USDT or USDC, whose issuers hold dollars. MKR holders voted on which collateral to accept and what interest to charge.
In August 2024 MakerDAO announced the Sky rebrand, and in September it launched a new stablecoin, USDS, and a new governance token, SKY. DAI can be upgraded to USDS, each MKR converts into 24,000 SKY, and DAI remains in use. On the Crypto Nation map, SKY stands in Ethereum City (the capital), because it was issued on Ethereum.
2. How USDS holds one dollar
Users lock crypto such as ether in vaults and borrow less USDS or DAI than their collateral is worth. If collateral value falls below a set level, it is liquidated (sold automatically) to cover the debt. A module that swaps other stablecoins such as USDC one-for-one, plus investments in assets like US Treasuries, makes up a large part of the backing.
Depositing USDS earns the Sky Savings Rate (SSR), funded by borrowing interest and real-world-asset income, and part of the surplus is used to buy SKY on the market. The rate is not fixed: SKY holders vote on it, along with collateral policies and risk limits.
3. Stars and milestones
Under a long-term plan called Endgame, Sky is shifting from one big organisation to sub-projects called ‘Stars’ that each run their own business. The first, Spark, runs lending and savings products and launched its own SPK token in 2025; Grove, focused on institutional credit, followed.
In 2025 SKY became the protocol’s only governance token, and USDS spread to chains beyond Ethereum. The older history matters too: on ‘Black Thursday’ in March 2020, liquidation auctions failed during a crash and new MKR was minted to cover losses, still a classic DeFi lesson.
4. Things to know
Much of USDS and DAI relies on centralised assets such as USDC and Treasuries, so critics question how decentralised it really is. Around launch there was debate over giving USDS a function to freeze addresses, and the protocol chose to phase out wrapped bitcoin (WBTC) as collateral after changes in WBTC’s custody.
The renaming left a complex mix of DAI and USDS, MKR and SKY. Voting power is concentrated among large holders, and smart-contract bugs or sudden collateral crashes remain risks; like any stablecoin, USDS can briefly slip from one dollar in turbulent markets.
Written from information public up to October 2026. It does not recommend or rate any coin and is not investment advice. If something is wrong, please tell us through the contact page.