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SKY Governance Token
About SKY Governance Token
Sky (SKY) is the native governance token of the Sky Protocol, introduced during MakerDAO's 2024 rebranding to enhance decentralized decision-making. As an upgraded version of MKR, SKY was distributed at a conversion rate of 1 MKR to 24,000 SKY, significantly expanding the token supply to foster broader community participation. SKY empowers holders to vote on protocol parameters, including stability fees, collateral management, and incentive structures, ensuring that governance remains decentralized and adaptive. Beyond voting, SKY can be used in various ecosystem modules—such as Activation and Seal Rewards—to earn additional assets, serve as collateral for borrowing USDS, and facilitate trading via liquidity pools. Developed by the MakerDAO team led by Rune Christensen, SKY plays a critical role in securing and evolving the decentralized financial infrastructure of the Sky Protocol.
The Sky Protocol is a decentralised financial ecosystem that emerged from the rebranding of MakerDAO in 2024. It was designed to improve governance efficiency, enhance system resilience, and provide a more scalable structure for decentralised finance (DeFi). The protocol builds on the Maker framework, maintaining decentralised governance while introducing upgraded financial instruments, including the Sky Dollar (USDS) stablecoin and the SKY governance token.
The Sky ecosystem offers multiple functionalities, such as the Sky Savings Rate (SSR), Sky Token Rewards (STRs), Seal Rewards, and the upcoming Activation Rewards. Additionally, SkyLink provides a bridge between Ethereum Layer 1 and Layer 2 networks, enabling lower-cost transactions. The Sky Protocol also features Peg Stability Modules (PSMs) to stabilise USDS and governance mechanisms that enable community-driven decision-making.
The ecosystem includes independent decentralised projects called Sky Stars, such as Spark, which focuses on DeFi lending and borrowing solutions. The Sky Atlas serves as a foundational governance framework, documenting rules and processes for the ecosystem’s evolution.
The migration from MakerDAO to the Sky ecosystem included the introduction of SKY as the governance token, replacing MKR. Holders of MKR were given the option to upgrade to SKY at a fixed rate of 1:24,000. This change was implemented to address governance scalability challenges and ensure broader participation in decision-making processes within the Sky Protocol.
The Sky ecosystem continues to support MakerDAO’s legacy assets, including DAI and MKR, while offering upgraded versions in the form of USDS and SKY. Governance decisions regarding the long-term role of legacy tokens remain in the hands of the community through onchain voting.