SKY and USDS are here. Use DeFi Saver to access them.

Filip Josipovic -

Sky, until recently MakerDAO, has introduced USDS and SKY for all users.

What’s happening with MakerDAO?

MakerDAO officially rebranded to Sky on September 18th, introducing a few big updates at the time. The biggest changes are DAI upgrading to USDS, and MKR to its successor, SKY. But the shift goes beyond just new tokens.

The plan aims to further decentralize the Maker protocol into sub-DAOs - multiple stars under one Sky. Think of them as independent projects with their own governance tokens that still work within Sky’s framework, helping it scale further.

Spark, the already highly popular DeFi lending platform (that's also available on DeFi Saver), is the first such sub-DAO, and the platform's SPK token is currently being "pre-farmed" by users.

All of this is part of the bigger vision MakerDAO had been developing in the last few years. The last step, or "Endgame," is the point when all the technical and governance systems are locked in, and only the core functions and SubDAOs are left to manage.

You can check out the full breakdown of Endgame here or read on for the specifics of the MakerDAO - Sky transformation and what you can do with Sky in the DeFi Saver app right now.

Accessibility, scalability, and smoother user experience

From now on USDS is the upgraded version of DAI within the Sky Protocol and the new token is designed to improve the user experience with more rewarding opportunities.

Specifically, once you convert DAI to USDS, you can already choose between utilizing the Sky Savings Rate, supplying your USDS to earn SKY rewards or supplying USDS to earn Chronicle Points.

And if that sounds enticing, remember you can use DeFi Saver to migrate DAI to USDS, at a fixed 1:1 rate.

Additionally, SKY replaces MKR as the governance token in the Sky ecosystem. For every MKR held, you’ll get 24,000 SKY, a fixed rate conversion that you can also do in our new Sky dashboard. While MKR currently handles onchain governance, SKY voting will be available soon. 

According to Sky announcements, all these token upgrades are optional. You are free to convert them back and forth and can continue using DAI and MKR if you prefer.

More lucrative rewards

As mentioned, Sky aims to introduce a new, more rewarding system for USDS users and there's already more than a few options to choose from.

Sky Token Rewards

Users can supply any amount of USDS to the Sky Token Rewards module to start earning rewards and accumulate SKY over time. The reward rate will adjust itself based on the token's issuance rate, market price, and the user’s share in the total asset pool linked to the module.

In short, users can now farm SKY rewards directly by supplying USDS, with 600 million SKY distributed yearly.

Chronicle Points

Outside of SKY token rewards, users can also supply their USDS to earn CLE Points. While Chronicle Points are not a native feature of the Sky Protocol, the Chronicle Protocol has long been a backbone of Maker and now Sky, being the oracles protocol that powers the lending protocols within this ecosystem.

Sky Savings Rate

Potentially most important, with new tokens, Sky Protocol has also introduced the Sky Savings Rate – an automated feature that compounds USDS in real time. It's variable and set by Sky ecosystem governance through onchain voting.

You can supply USDS to this non-custodial module to accumulate yield over time. When you do, you receive sUSDS tokens that will gradually accrue extra USDS value. There’s no minimum requirement, and funds can be withdrawn at any time.

Upcoming Sky features

There are three additional features that Sky already announced as being in the works:

  1. Users will be able to supply SKY tokens to the Activation module to earn Activation Token Rewards in USDS or Sky Star tokens (no restrictions or exit fee). 
  2. Sealed Activation – the second upcoming feature – is more long-term oriented. With governance approval, users will be able to seal their SKY or MKR tokens to earn higher Activation Token Rewards in USDS or Sky Star tokens. An exit fee will apply only to the sealed tokens, not the rewards.
  3. SkyLink is also in development, simplifying token management by connecting Sky Protocol to supported L2 networks. SkyLink will allow you to access lower-cost platforms and use USDS, SKY, DAI, MKR, Sky Star tokens, the Sky Savings Rate, and Sky Token Rewards.

What can I do on DeFi Saver right now?

All DeFi Saver users can migrate their DAI, sDAI and MKR tokens into the USDS, sUSDS and SKY counterparts respectively (or convert them back) whenever needed. All migrations are fee-free and done using native Sky Protocol smart contracts.

We also aim to fully support the new tokens in any protocols they are integrated with, such as Spark and Aave.

Here’s a quick list of everything you can do using the Sky dashboard in the DeFi Saver app today:

  • Convert DAI/MKR to USDS/SKY (and vice versa)
  • Supply USDS to Sky Savings Rate module
  • Upgrade sDAI (or DAI directly deposited in DSR) to sUSDS (📸below)
  • Supply USDS for $SKY rewards or Chronicle points Points

We put a lot of effort into designing and creating a fully fledged, yet neatly packed Sky Protocol dashboard and we think you'll find it a rather nice place to be.

Check out the Sky Protocol dashboard

What’s next for Sky?

New features and integrations will roll out steadily in the coming months. Here’s a quick preview of some developments already approved by or proposed to Sky Governance:

Sky join hands with Aave

Sky and Aave have teamed up to launch the Sky Aave Force, combining their strengths to create a new Aave market for borrowing USDS. This flagship integration stacks aims to seamlessly integrate USDS and sUSDS into Aave and provide further incentives to boost growth for both sides.

Sky Seal Module

The SKY Seal Module lets eligible SKY and MKR holders lock their tokens with a 5% Exit Fee, earning USDS rewards, and generating USDS using SKY and MKR as collateral. Other rewards, like SPK, will be offered later on. 

The Exit Fee starts at 5% and rises by 1% every 6 months, affecting all users, until it reaches a permanent 15% after 5 years.

You can find more information about upcoming events in Rune's post on X/Twitter. 

We hope you enjoyed our rundown of all the new and in-development things in the Sky ecosystem. And if there's anything you'd like to discuss more, feel free to join us in the DFS discord where we often chat about current trends in DeFi.