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What is Sky?

Sky is the decentralized governance protocol formerly known as MakerDAO, the pioneering DeFi project that launched the DAI stablecoin in December 2017. Founded by Rune Christensen in 2014, MakerDAO established the blueprint for overcollateralized, crypto-backed stablecoins on Ethereum, allowing users to lock ETH and other approved assets in smart contract vaults to mint DAI, a dollar-pegged stablecoin that has maintained its peg through multiple market cycles without relying on centralized reserves. In August 2024, following years of community debate around the ambitious 'Endgame' roadmap, MakerDAO officially rebranded to Sky and introduced the SKY governance token to replace MKR at a conversion ratio of 1 MKR to 24,000 SKY. The rebrand also launched USDS, a new stablecoin that runs alongside DAI and can be upgraded from DAI at a 1:1 ratio, adding features like the Sky Savings Rate which lets holders earn yield directly on their USDS balance. The Sky ecosystem is structured around SubDAOs called 'Stars,' semi-autonomous units that handle specialized functions such as real-world asset collateral, lending markets, and community initiatives, with Spark Protocol being one of the most prominent Stars offering lending and borrowing services built on Sky infrastructure. As of 2024 and into 2025, the Sky protocol remains one of the largest DeFi protocols by total value locked, consistently ranking in the top tier alongside Aave and Lido, and DAI/USDS together represent one of the most widely used decentralized stablecoin systems in crypto. The protocol has historically navigated several notable controversies, including the Black Thursday incident in March 2020 when extreme ETH volatility caused under-collateralized liquidations that forced the emergency minting of MKR to cover system losses, and more recent debates over Sky's increasing exposure to real-world assets such as US Treasury bonds, which critics argue introduces centralization risk while supporters note it has significantly boosted protocol revenue. The Endgame plan also sparked community tension over its complexity and the MKR-to-SKY migration mechanics, though the transition has proceeded steadily with major exchanges including Binance, Coinbase, and Kraken listing SKY trading pairs. Sky has pursued integrations across the broader Ethereum ecosystem, partnering with custody providers like Coinbase Custody and BlockTower for real-world asset tokenization, and Spark has expanded DAI/USDS liquidity across Layer 2 networks including Base, Arbitrum, and Optimism. The protocol's governance token holders actively vote on parameters such as stability fees, collateral types, debt ceilings, and the Sky Savings Rate, making SKY one of the most battle-tested governance tokens in DeFi. Christensen continues to guide strategic direction through his contributions to the Sky ecosystem, while day-to-day protocol operations are handled by core units and SubDAOs operating under community-approved mandates. The roadmap ahead includes launching additional Stars, expanding real-world asset collateral, and eventually deploying Sky on its own application-specific chain called NewChain, positioning Sky as a foundational layer of decentralized finance rather than a single-product protocol.

Key Features of Sky

• Decentralized Stablecoin Issuance: Sky governs the issuance of DAI and USDS, two decentralized stablecoins backed by overcollateralized crypto and real-world assets. Unlike custodial stablecoins, these assets are minted through transparent on-chain smart contracts that any user can audit or interact with directly.
• Endgame SubDAO Architecture: The Sky ecosystem is organized into specialized SubDAOs called Stars, each handling focused functions like lending, real-world assets, or community growth. This modular structure distributes governance load and allows rapid iteration without burdening the core protocol.
• Sky Savings Rate: USDS holders can earn native yield by activating the Sky Savings Rate, which pays interest sourced from protocol revenue including stability fees and real-world asset returns. Rates are adjusted by governance and accrue automatically without lockups or third-party intermediaries.
• Overcollateralized Vaults: Users can mint DAI or USDS by locking collateral such as ETH, stETH, or wBTC into Sky vaults at ratios typically above 150%. This overcollateralization has allowed the system to maintain its peg through extreme volatility events since 2017.
• Real-World Asset Integration: Sky was among the first major DeFi protocols to integrate tokenized US Treasuries and other traditional financial instruments as collateral. This hybrid approach generates substantial protocol revenue that flows back to SKY holders and USDS savers.

Sky Use Cases

• Protocol Governance Voting: SKY holders vote on critical parameters including stability fees, collateral onboarding, the Sky Savings Rate, and SubDAO budgets. Governance happens on-chain through the Sky Portal, giving token holders direct control over one of DeFi's largest protocols.
• Minting Decentralized Dollars: Traders and long-term holders use Sky vaults to mint DAI or USDS against their crypto holdings without selling. This unlocks liquidity for spending, yield farming, or leverage while retaining upside exposure to the collateral asset.
• Earning Sky Savings Rate: USDS holders can deposit into the Sky Savings Rate contract to earn protocol-generated yield on dollar-denominated holdings. It functions as a decentralized alternative to money market accounts, with rates set transparently through governance.
• DeFi Collateral and Liquidity: DAI and USDS are deeply integrated across Aave, Curve, Uniswap, and countless DeFi protocols as base trading pairs and lending collateral. This makes Sky-issued stablecoins essential building blocks for yield strategies and cross-protocol composability.
• Staking SKY for Rewards: Through the Sky ecosystem, SKY tokens can be used in farming programs that distribute SubDAO tokens and other incentives. This allows governance participants to capture additional upside from the growth of specialized Stars within the broader Sky universe.

Sky Tokenomics

Total Supply

The SKY total supply was established by the 1:24,000 migration from MKR, with approximately 24 billion SKY corresponding to the roughly 1 million MKR that existed at migration time. Exact circulating figures adjust as MKR holders convert and as governance mints or burns occur.

Circulating

Circulating SKY grows as MKR holders voluntarily migrate through the official upgrade contract, since legacy MKR remains functional. Dynamic — see CoinGecko for live figures.

Utility

SKY is the governance token of the Sky Protocol, used to vote on risk parameters, collateral types, stability fees, and SubDAO initiatives. SKY can also be staked in ecosystem programs to farm SubDAO tokens and participate in protocol security mechanisms.

Emission

New SKY can be minted by governance to cover bad debt or fund ecosystem incentives, similar to the mechanism MKR used. SKY can also be burned when protocol surplus exceeds buffer targets, creating a dynamic supply that reflects protocol health rather than a fixed emission curve.

How to Buy Sky

1. 1

   1. Create a Binance account

   Visit binance.com or open the Binance app and register with your email or phone number. Set a strong password and enable two-factor authentication under Security settings to protect your account before depositing funds.

2. 2

   2. Complete identity verification

   Navigate to the Identification page in your profile and submit government-issued ID plus a selfie for KYC review. Verification typically completes within minutes to a few hours and unlocks full deposit, trading, and withdrawal limits for SKY.

3. 3

   3. Deposit funds

   Go to Wallet then Fiat and Spot, and choose Deposit to fund your account with USDC, USDT, or local currency via bank transfer or card. Alternatively, transfer crypto from an external wallet using the Deposit Crypto option and selecting the correct network.

4. 4

   4. Trade SKY on the spot market

   Click Trade then Spot in the top menu and search for SKY in the pair selector, then select the SKY/USDC or SKY/USDT market. Enter your order size using a Market order for instant execution or a Limit order to set your preferred price, then confirm the trade.

5. 5

   5. Secure your SKY

   After purchase, your SKY will appear in your Binance Spot Wallet where you can hold it or withdraw to a self-custody wallet like MetaMask. For large holdings, consider transferring to a hardware wallet and using it to participate in Sky governance directly on the Sky Portal.

Frequently Asked Questions