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Sky Dollar
About Sky Dollar
Sky Dollar (USDS) is a decentralized stablecoin introduced with the Sky Protocol rebrand in 2024, serving as an upgraded alternative to DAI. Designed to maintain a soft peg to the U.S. dollar, USDS is backed by surplus collateral and stabilized via Peg Stability Modules (PSMs), which allow for direct, predictable exchanges with other stablecoins such as USDC and USDT. As a core asset within its ecosystem, USDS enables users to access a range of decentralized financial services: it can be deposited in savings modules to earn interest, used to obtain governance rewards in the form of SKY tokens, and traded across various liquidity pools. In addition, holding USDS empowers users to participate in on-chain governance decisions. By combining stability, broad utility, and self-custody, USDS represents a significant evolution in decentralized finance.
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. Also, 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.
In August 2024, MakerDAO rebranded to the Sky ecosystem, bringing major upgrades to its decentralised financial infrastructure. The migration introduced USDS as the upgraded stablecoin for DAI holders, while MKR governance token holders had the option to convert to SKY at a rate of 1:24,000. This transition aimed to improve governance efficiency, broaden participation, and support the next phase of DeFi development.