Sky (formerly MakerDAO) is DeFi's longest-running protocol — issuing DAI since 2017 and its successor USDS since 2024. It remains the reference decentralized stablecoin issuer with ~$12B in stablecoins outstanding and native yield products (DSR + SSR) that anchor DeFi yields for stables.
What Sky actually is
Sky is a decentralized protocol that lets users deposit collateral (crypto or tokenized real-world assets) and mint DAI or USDS stablecoins against it. The system is governed by MKR/SKY token holders through on-chain voting. Since 2024's "Endgame" rebrand, MakerDAO became "Sky" — with DAI + USDS + Spark forming the core product suite.
Sky's current product surfaces:
- DAI + USDS: the two stablecoins (DAI original, USDS new-brand successor)
- DSR + SSR: DAI Savings Rate and USDS Savings Rate — deposit your stablecoins and earn native yield
- Spark: lending protocol front-end tightly integrated with DAI/USDS
- Vaults: mint DAI/USDS against ETH, stETH, wBTC, and other collateral
DAI → USDS transition
In 2024, MakerDAO rebranded to Sky and launched USDS as a "next-gen" stablecoin alongside DAI. USDS uses the same overcollateralization model but with new tokenomics (SKY replacing MKR gradually). DAI remains fully operational; users can convert 1:1 between DAI and USDS at any time.
For most users, DAI and USDS are functionally equivalent. USDS offers slightly better yield (SSR often higher than DSR) and represents the future direction. Some DeFi protocols still favor DAI for legacy integration; others have migrated to USDS.
DSR / SSR: native stablecoin yield
The DAI Savings Rate (DSR) and USDS Savings Rate (SSR) are among the most important products in DeFi. Deposit DAI into DSR, and it earns interest paid from Sky's balance sheet — currently ~4-8% APR depending on protocol revenue.
These rates set the "risk-free" benchmark for DeFi stablecoin yields. When SSR is 6%, any competing yield below that with more risk is a bad trade.
Real-world assets (RWA)
Sky has become the reference DeFi protocol for tokenized RWA. A meaningful portion of Sky's balance sheet is now short-term US Treasuries via partnerships with Monetalis, BlockTower, and other RWA specialists. This diversifies backing beyond crypto collateral and provides steady yield to fund DSR/SSR.
Some purists dislike RWA exposure (introduces off-chain counterparty risk). Others see it as a pragmatic bridge to sustainable yield. Both views are legitimate.
Security posture
- Track record: 7+ years operational (longest of any DeFi protocol)
- Audits: multiple independent audits ongoing
- Governance: MKR/SKY token holders vote on protocol changes
- Emergency shutdown: unique mechanism to gracefully wind down if the protocol fails
- Notable incident: "Black Thursday" March 2020 saw MKR issued to cover bad debt from broken liquidation auctions — Sky recovered but learned lessons
Who should use Sky
- Users seeking decentralized stablecoin exposure (DAI/USDS over USDC/USDT)
- Stablecoin holders wanting native yield via DSR/SSR
- Users borrowing DAI/USDS against ETH/BTC collateral
- DeFi power users building strategies around Spark or Sky's tokenized RWA rates
Who should also check alternatives
- Users prioritizing regulatory clarity: USDC (Circle) is more regulated
- Users wanting immutable stablecoin design: LUSD (Liquity) has zero governance
- Yield-maximizing strategies: Pendle + Sky products often offers better fixed yield
Verdict
Sky is the longest-running DeFi protocol and the reference decentralized stablecoin issuer. DAI/USDS + DSR/SSR are essential DeFi primitives every serious user should understand. Not the flashiest brand in DeFi but arguably the most important infrastructure.