Key Takeaways

  • SKY and USDS are the native tokens of the decentralized Sky Protocol, representing upgraded versions of MakerDAO’s MKR and DAI.

  • USDS is a soft-pegged, collateral-backed stablecoin designed to maintain a value equal to or close to one US dollar.

  • You can trade, save, upgrade tokens, stake SKY, and earn rewards while retaining full control over their funds.

  • Sky.money is the non-custodial gateway providing 24/7 access to the Sky Protocol’s trading, saving, staking, and governance features.

What Is Sky?

Formerly known as MakerDAO, Sky is a decentralized finance (DeFi) platform that has evolved to offer a more scalable, user-friendly, and community-governed alternative. Sky builds upon MakerDAO’s legacy by introducing upgraded native tokens, new features, and a streamlined governance system focused on resilience and simplicity.

At its core, the protocol revolves around two key tokens: USDS, a stablecoin pegged to the US dollar and SKY, the governance token. Sky.money is the main gateway for you to interact with the protocol while maintaining full control of their assets. 

How Sky Works

Sky Protocol provides you with a range of financial services, including trading, saving, and rewards accumulation, built on an open and transparent infrastructure. The protocol runs on permissionless liquidity pools and a stablecoin system combined with decentralized governance, meaning there’s no middleman controlling your money or decisions.

SKY and USDS are the two native tokens of the Sky Protocol:

  • USDS: The stablecoin of the decentralized Sky Protocol and the upgraded version of DAI. It is supported by excess collateral and is soft-pegged to the U.S. dollar, aiming to maintain a value equal or close to one dollar. 

  • SKY: The native governance token of the Sky Protocol and ecosystem, upgraded from MakerDAO’s MKR token. It plays an important role in decentralized governance, staking, and rewarding active participation within the ecosystem.

Accessing the Sky Protocol With Sky.money

Sky.money is the non-custodial gateway that connects you to the Sky Protocol. It allows trading between popular tokens and Sky ecosystem tokens. You can upgrade DAI to USDS and MKR to SKY and access to savings and rewards features through the platform. You can also participate in the Sky Savings Rate (SSR) to earn additional USDS or access Sky Token Rewards in the form of SKY tokens through the Sky.money app.

Through the app, you can:

  • Upgrade MKR tokens to SKY at a ratio of 1 MKR to 24,000 SKY.

  • Trade USDC, USDT, ETH, or USDS for SKY directly.

  • Earn SKY rewards by supplying USDS to the Sky Token Rewards module.

  • Stake SKY tokens in the Sky Protocol’s Staking Engine to earn rewards.

  • Borrow USDS by staking SKY tokens.

Alternatively, you can also buy SKY on cryptocurrency exchanges like Binance.

Sky Savings Rate (SSR)

The Sky Savings Rate is an automated system that lets you earn compounded USDS over time. When you deposit USDS into the SSR module, they receive sUSDS tokens that represent their stake and any earned value. USDS tokens are added to the pool every few seconds according to the current SSR rate, causing the value of their sUSDS to grow.

You can redeem sUSDS anytime for the original USDS plus any accumulated rewards. The SSR rate fluctuates based on decisions made through decentralized on-chain voting by the Sky Ecosystem Governance community. Smart contracts automatically handle the conversion between USDS and sUSDS, ensuring they maintain equal dollar value with no fees when redeeming.

Sky Token Rewards (STRs)

USDS holders can take part in the Sky Token Rewards module to earn SKY governance tokens as rewards. Both the supplied USDS and the rewards earned are secured in non-custodial smart contracts, ensuring that no third party has custody of the assets. Rewards are distributed based on each user’s share of the total USDS held in the rewards pool and may vary according to changes in pool size and issuance rates. By holding USDS and earning SKY rewards, you can support the Sky ecosystem projects while retaining full control over their funds.

SkyLink is the bridging system that connects Sky with multiple Layer-2 networks such as Base, Arbitrum, Optimism, and Unichain. It enables you to move your Sky tokens like USDS and SKY, and use features like the Sky Savings Rate, without paying high gas fees or waiting long for transactions to complete. For everyday users, SkyLink makes interacting with the Sky ecosystem smoother and cheaper, so you can save, trade, and earn rewards more efficiently across multiple blockchains.

The Sky Ecosystem and Sky Stars

The Sky ecosystem is a community-driven network of decentralized projects known as Sky Stars. These independent projects foster rapid innovation and growth within the larger Sky framework. Each Sky Star may have its own governance tokens, treasury, and community governance, while aligning with the overall goals of the Sky ecosystem. Spark, an on-chain asset allocator that deploys stablecoin liquidity across DeFi, CeFi, and real-world assets, is the first official Sky Star and will integrate closely within the Sky ecosystem. 

Closing Thoughts

The Sky Protocol represents a meaningful step forward in decentralized finance by evolving the widely known MakerDAO ecosystem into a more scalable, user-friendly, and community-governed platform. Through its native tokens SKY and USDS, alongside innovative features like Sky.money, SkyLink, and Sky Stars, the protocol aims to broaden DeFi participation and create more reliable, non-custodial financial tools.

Further Reading

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