Sky

Sky is a set of Ethereum contracts that lets people borrow a dollar stablecoin against collateral, and that pays holders of the stablecoin a savings rate. Rune Christensen started the project as MakerDAO in 2014; single-collateral DAI (now called SAI) went live in December 2017 against ETH only, and multi-collateral DAI followed in November 2019. For most of DeFi's history "Maker" was the lender and DAI was the decentralised dollar.

The name changed on 27 August 2024. Everything under the Sky brand is a continuation, not a fork: the same core contracts (the Vat, liquidation and oracle modules), the same governance, with new tokens layered on top (CoinDesk). The core lending system held about $5.9 billion on 27 September 2026 per DefiLlama.

USDS is issued by the Sky Protocol itself, not by a company. You get it three ways: open a vault and borrow it against collateral, swap USDC for it one-for-one through the peg stability module, or upgrade DAI one-for-one. Binance converted all DAI balances on its platform to USDS on 7 April 2026; on-chain, the switch is still voluntary.

The Sky Savings Rate is a governance-set yield paid to anyone who deposits USDS and receives sUSDS. It is paid from what the protocol earns: stability fees on vault loans, Treasury yield on USDC and tokenised funds, and credit deployed through the Stars. It was above 8% at points in late 2024 and early 2025 and was cut to 3.6% in September 2026 as rates and borrowing demand fell. The DAI Savings Rate still exists for DAI holders.

The peg has mostly held, with one big exception. When USDC fell to $0.87 during the Silicon Valley Bank failure in March 2023, DAI followed it to about $0.89, because more than half of DAI's backing was USDC in the peg module (CoinDesk). That dependence has not gone away; it moves with USDC demand. Our DAI/USDS card weighs the collateral mix against the on-chain verifiability.

The rebrand was the most visible step of Endgame, Christensen's 2022 plan to break Maker into a core protocol plus semi-independent units. The practical changes for holders:

1. 0127 Aug 2024: MakerDAO announces the Sky name; USDS, sUSDS and SKY go live on 18 Sept 2024.
2. 02May 2025: governance disables SKY-to-MKR conversion; the upgrade becomes one-way.
3. 0322 Sept 2025: a Delayed Upgrade Penalty starts. Each MKR converts to 1% less SKY, and the cut grows by one point every three months (The Block).
4. 04Feb–Mar 2026: governance cuts SKY staking emissions by about 162 million tokens over 180 days while buybacks continue.

About 81% of MKR had been converted when the penalty vote opened. SKY is now the only governance token that matters: holders vote on executive spells, stake to earn rewards (about 67% was staked in March 2026) and receive the benefit of buybacks. By early March 2026 Sky had spent $114.5 million of USDS buying back 1.83 billion SKY (CoinDesk). Price and supply sit on the SKY market page.

Maker was the first large DeFi protocol to put off-chain assets behind its stablecoin. It began with small loan vaults run through Centrifuge around 2020–2021, then in 2022–2023 moved hundreds of millions into short-dated Treasuries through structures such as Monetalis Clydesdale and BlockTower Andromeda. By 2023 real-world assets were the largest source of revenue, which is why the savings rate could exist at all.

Under Sky the real-world book is run by Stars, separate teams with their own mandates. Grove launched in June 2025 with a $1 billion allocation to the Janus Henderson Anemoy AAA CLO fund, tokenised on Centrifuge (CoinDesk). Obex, a newer Star, had about $1 billion deployed across mortgages, AI infrastructure, solar and corporate credit by early 2026 (BlockEden). These produce yield but add counterparties that no one can check on-chain: fund managers, custodians and SPV trustees.

"Backed by real-world assets" here means Sky lends USDS into regulated funds and receives their tokens; if a fund manager or custodian failed, governance would have to recover value off-chain.

Formally, SKY holders do. Changes ship as executive spells that pass when they gather more SKY voting weight than the current spell, then wait out a delay before execution. The rules the executives follow are written in the Sky Atlas, a public rulebook maintained by governance. The Maker Foundation handed control to the DAO and wound down in 2021, so there is no company that issues USDS.

In practice, a few groups shape most decisions. Rune Christensen still sets the direction; Endgame, the rebrand and the Star model were his proposals. Contributor teams write the spells, and risk work comes from specialists such as Block Analitica, which has advised Maker since 2019. Voting weight is concentrated: a handful of delegates and large holders can pass a spell, which our MakerDAO card counts as a control risk.

On 12 March 2020 ETH fell about 43% in a day. Gas prices jumped roughly tenfold, most liquidation keepers ran on fixed gas settings and stalled, and a few bidders won collateral auctions with zero-DAI bids. One bot took about $8.32 million of ETH for nothing. Vault owners lost their collateral beyond their debt, and the system was left with about $4.5 million of DAI it could not cover.

Maker covered the hole the way its design intended: it minted new MKR and sold it in debt auctions from 19 March 2020, diluting MKR holders instead of DAI holders. Vault owners who lost excess collateral asked for compensation and governance voted not to pay them (The Defiant). The auction system was redesigned in 2021 (Liquidations 2.0, Dutch auctions) so a zero bid can no longer win.

We found no exploit of Sky's core contracts in 2025 or 2026.