MakerDAO rebrands as Sky, reveals new stablecoin and governance token
Key Takeaways
- MakerDAO rebrands as Sky, introducing USDS stablecoin and SKY governance token as upgrades to DAI and MKR.
- Sky Protocol offers liquidity provision for USDS, with variable rate rewards paid in SKY.
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MakerDAO revealed its rebranding to Sky along with the new names of its upgraded tokens, SKY and Sky Dollar (USDS) on Aug. 27.
SKY is a new governance token being upgraded from Maker’s MKR, while USDS is the latest version of the stablecoin DAI. While DAI and USDS can be swapped on a 1:1 parity, each MKR token can be exchanged for 24,000 SKY.
Both tokens were introduced on Aug. 22 under the names NewStable and NewGovToken. According to the announcement, the upgrade is optional, and users can exchange their SKY and USDS back to MKR and DAI, respectively.
Users will be able to supply liquidity with USDS to the new Sky Protocol, in a similar way as users currently can lock DAI into the DAI Savings Rate (DSR) program. Thus, a variable rate of accrual paid in SKY is earned by locking USDS into Sky.
Additionally, the announcement also highlighted that Sky Protocol might get incentives from other decentralized projects, which could end up in rewards via different tokens to USDS stakers.
Notably, USDS will be swappable for Ethereum (ETH), USD Coin (USDC), and Tether USD (USDT).
The announcement also includes a link to boosted token rewards, although they won’t be available for users in certain jurisdictions, such as the US.
Regulatory compliance for mass adoption
The idea of upgraded versions of MKR and DAI was first formally shared in a May 15 blog post by MakerDAO co-founder Rune Christensen.
Christensen highlighted in the text that DAI is “straddling two worlds,” one being represented by the decentralized finance ecosystem and the other being the stablecoin’s original purpose of delivering utility and value to real people at scale.
Notably, these words are “fundamentally in friction with each other,” Christensen added. The solution proposed in the post is to create a new stablecoin focused on mass adoption, which needs to be regulatory compliant in the jurisdictions where it is offered.
Moreover, the new USDS stablecoin will retain the value-accruing capabilities of DAI. Meanwhile, DAI will remain the truly decentralized stablecoin that users might use freely in decentralized applications.
All of these steps are part of Sky’s “Endgame,” which is a proposal aimed at boosting the protocol’s products into the mainstream. These steps include fundamental changes in governance and tokenomics, aimed at making Sky self-sustainable.
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Author: Gino Matos
