SKY

• Sky is the rebranded successor to MakerDAO, the protocol behind the DAI stablecoin.

• SKY replaced MKR as the governance token, with holders able to vote on collateral types, rates and treasury use.

• The system issues USDS alongside DAI and pays a savings rate to holders who lock the stablecoin.

• MKR converts to SKY at a fixed rate of 1 to 24,000. Conversions made after 18 September 2025 incur a penalty fee, though MKR remains functional for holders who do not upgrade.

• The token is used for governance and can be staked for rewards within the Sky ecosystem.

• Protocol surplus has historically been used to buy and burn the governance token, though mechanics changed with the rebrand.

Pros:

• One of the longest-running DeFi protocols, operating through multiple market cycles.

• Substantial revenue from real-world asset collateral and treasury holdings.

• DAI remains among the most widely integrated decentralised stablecoins.

Cons:

• The rebrand and token conversion created confusion, and holders who convert late now pay a penalty fee.

• Increasing reliance on centralised real-world collateral cuts against the original decentralisation thesis.

• Governance is concentrated among large holders and delegates.

• Exposure to the oldest and largest decentralised stablecoin issuer.

• Revenue is real and traceable to collateral yield rather than emissions.

• Set against governance concentration and the shift toward centralised backing.

• The longest continuous operating record of any decentralised stablecoin system, with a stablecoin that survived multiple market crashes without failing.

• Dollar-denominated savings and credit require a bank in most jurisdictions.

• Overcollateralised on-chain issuance provides both without one, at the cost of capital efficiency.

• Originated as MakerDAO, founded by Rune Christensen in 2014.

• Now governed by SKY holders through the Sky ecosystem's decentralised governance process.

• MKR was distributed privately from 2015 onward rather than through a public ICO. SKY entered circulation through the MKR conversion.

• Real-world asset collateral introduces counterparty and custodian exposure the protocol cannot enforce on-chain.

• Regulatory treatment of decentralised stablecoins remains unsettled in most markets.

• Governance capture risk given concentrated voting power.

• Complexity of the rebrand and multi-token structure raises user error risk.

The founding Maker whitepaper set out a system for issuing a dollar-pegged token against volatile crypto collateral, holding the peg through overcollateralisation, automated liquidation of undercollateralised positions, and a governance token that absorbs losses of last resort by being minted and sold. Its central claim is that a stablecoin does not need a bank if the collateral buffer and liquidation machinery are large and fast enough. Sky's later materials document the departure from that model: a growing share of backing now sits in short-term treasuries and off-chain credit, which improves yield and stability while reintroducing exactly the counterparty exposure the original design was written to avoid.