MakerDAO has evolved into Sky, a decentralized finance (DeFi) ecosystem built around stablecoins, collateralized borrowing, savings features and community governance. The project retains its roots in MakerDAO, which introduced the DAI stablecoin and MKR governance token, while expanding its ecosystem with USDS, a newer dollar-pegged stablecoin, and SKY, its newer governance token.
Although DAI and MKR remain relevant, understanding how they relate to USDS and SKY is essential to understanding how the Sky ecosystem works today.
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Sky Protocol is a decentralized finance (DeFi) protocol that evolved from MakerDAO, one of the earliest decentralized stablecoin projects. It provides infrastructure for stablecoin issuance, collateralized borrowing, savings features and on-chain governance.
Its ecosystem includes DAI, the original stablecoin, and USDS, a newer dollar-pegged stablecoin, alongside MKR, the legacy governance token, and SKY, the token that now governs the protocol.
Users can interact with Sky Protocol in several ways.
Sky’s smart contracts power these functions, while interfaces such as Sky.money give users access to supported features. The protocol builds on MakerDAO’s original infrastructure, but its products, governance and token-conversion arrangements have changed. Users should check the latest official documentation before converting tokens or interacting with its contracts.
MakerDAO rebranded to Sky in 2024, introducing new products and tokens while retaining its underlying decentralized finance infrastructure. The transition brought USDS as a newer stablecoin alongside DAI and SKY as the successor to MKR for governance.
However, the older tokens and savings mechanisms have not all been discontinued, so the differences depend on which product you’re using.
| Legacy terminology | Current ecosystem |
|---|---|
| MakerDAO | Sky Protocol / Sky ecosystem |
| DAI | USDS is the newer stablecoin; DAI remains available |
| MKR | SKY is the successor governance token |
| DAI Savings Rate (DSR) | Sky Savings Rate (SSR), accessed through sUSDS |
The main differences are:
Overall, Sky represents an evolution of MakerDAO rather than a complete replacement of every legacy product. DAI and MKR remain relevant, but users should distinguish the older mechanisms from Sky’s current products and check the applicable conversion rules before making changes.
Sky Protocol uses smart contracts to manage collateralized borrowing, stablecoin issuance and governance. Its core functions work together to support its stablecoins and decentralized financial services.
DAI and USDS are stablecoins in the Sky ecosystem designed to maintain a value close to $1. DAI is MakerDAO’s original stablecoin, while USDS is the newer stablecoin introduced as part of the transition to Sky. Both remain available, and users can convert between them through the protocol’s official converter.
| Feature | DAI | USDS |
|---|---|---|
| Purpose | Original MakerDAO stablecoin | Newer Sky ecosystem stablecoin |
| Target value | $1 USD | $1 USD |
| Relationship | Legacy stablecoin that remains available | Newer stablecoin within the same ecosystem |
| Conversion | Convertible to USDS at 1:1 | Convertible to DAI at 1:1 |
| Savings options | Eligible holders can access the legacy DAI Savings Rate | Eligible holders can deposit into the Sky Savings Rate and receive sUSDS |
The official DAI–USDS converter supports 1:1 conversion in either direction without protocol conversion fees. Users may still pay blockchain transaction fees, and availability can depend on the network and interface they use. Both stablecoins are designed to maintain their dollar pegs, but neither is guaranteed to trade at exactly $1 at all times.
The main practical difference is how each token fits into the ecosystem. DAI remains useful across supported applications and legacy integrations, while USDS is the newer stablecoin associated with Sky’s current products. USDS holders can access the Sky Savings Rate by depositing into the savings vault to receive sUSDS, a token that reflects accumulated savings.
MKR and SKY are governance tokens associated with MakerDAO and its successor, Sky Protocol. MKR is the legacy token, while SKY is the newer governance token used for the ecosystem’s current governance system.
The transition changes how holders participate in protocol decisions, but neither token guarantees voting influence over every outcome or provides a guaranteed financial return.
Key differences include:
| Feature | MKR | SKY |
|---|---|---|
| Role | Legacy governance token | Current governance token |
| Governance | Used in the legacy governance system | Used for current protocol governance |
| Conversion | Can be converted to SKY under applicable upgrade rules | Successor token at a protocol-defined conversion ratio |
| Investment considerations | Price depends on market demand and other factors | Price depends on market demand, token supply and other factors |
The published conversion ratio is 1 MKR to 24,000 SKY, as of October 2026.(1) However, Sky’s governance transition includes a delayed-upgrade penalty that can reduce the amount of SKY received by holders who convert after applicable deadlines.
Although SKY gives holders a role in governance, that utility is separate from its investment potential. Both MKR and SKY can fluctuate in price, and neither guarantees profits, dividends or a particular level of protocol revenue. Anyone evaluating either token should consider market volatility, governance changes, liquidity and the risks of the wider DeFi ecosystem.
Yes. Sky offers several ways to earn yield or rewards, including the Sky Savings Rate, token staking and ecosystem reward programs. Each option works differently and carries its own risks.
Remember: yields are not guaranteed. Rates and rewards can change or be discontinued, and earning a yield does not eliminate the risk of smart-contract vulnerabilities, stablecoin depegging or token-price losses.
Sky Protocol offers stablecoin and DeFi services, but using its products involves several risks:
Before using Sky, understand the specific product’s requirements, fees and risks. Avoid borrowing more than you can manage, and do not treat stablecoins or advertised yields as risk-free.
Sky Protocol may be worth considering if you want access to decentralized stablecoins, collateralized borrowing or on-chain savings features. Its established infrastructure and range of products give experienced DeFi users several ways to interact with the ecosystem without relying entirely on traditional financial intermediaries.
However, Sky is not suitable for everyone. Borrowing against crypto collateral can lead to liquidation, stablecoins can lose their dollar peg, and smart-contract vulnerabilities can result in losses. Savings rates and rewards can also change, while SKY’s market price can fluctuate significantly.
Sky may suit you if you:
You may want to avoid it if you:
Ultimately, Sky’s usefulness depends on your goals, experience and risk tolerance. Research the specific product you intend to use, check its current terms, and do not assume that a stablecoin or savings feature is risk-free.
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