What Is the Sky (SKY) App?

Key Concepts

SKY and USDS are the core tokens of the decentralized Sky protocol, functioning as advanced iterations of MakerDAO’s MKR and DAI. These tokens are purpose-built to address the evolving demands of DeFi users.

USDS is a collateral-backed, flexibly pegged stablecoin designed to maintain a value at or near one US dollar. Users can trade, save, and upgrade tokens, store SKY, and earn rewards while retaining complete autonomy over their assets.

Sky.money serves as a non-custodial gateway, delivering round-the-clock access to trading, savings, storage, and governance features in the Sky protocol.

What Is the Sky App?

Sky—formerly known as MakerDAO—has transformed into a DeFi platform that offers greater scalability, enhanced usability, and robust community governance. The Sky app builds on MakerDAO’s foundation, introducing upgraded native tokens, new features, and a streamlined governance system focused on flexibility and simplicity.

At its foundation, the protocol is anchored by two main tokens: USDS, a stablecoin pegged to the US dollar, and SKY, its governance token. This structure empowers users to interact securely and transparently with the ecosystem. Sky.money is the primary portal for engaging with the protocol, ensuring users maintain full control over their assets.

How the Sky App Works

The Sky protocol delivers a comprehensive suite of financial services—including trading, savings, and reward accumulation—on an open, transparent infrastructure. It operates via public liquidity pools and a decentralized stablecoin mechanism, meaning no intermediary oversees your funds or decisions.

SKY and USDS are the protocol’s native tokens. USDS serves as Sky’s decentralized stablecoin and is the upgraded version of DAI, backed by over-collateralization and flexibly pegged to the US dollar with the objective of maintaining a one-dollar value. SKY is the protocol’s governance token and the enhanced successor to MakerDAO’s MKR, playing a key role in decentralized governance, asset storage, and rewarding active participation within the ecosystem.

Accessing the Sky Protocol via Sky.money

Sky.money is a non-custodial portal that connects users to the Sky protocol, enabling trading between popular tokens and those within the Sky ecosystem. It allows for DAI-to-USDS and MKR-to-SKY upgrades, and provides access to savings and rewards features.

With Sky.money, users can upgrade MKR to SKY at a 1 MKR to 24,000 SKY ratio for easy conversion. They can also trade USDC, USDT, ETH, or USDS directly for SKY. Additionally, users can earn SKY rewards by providing USDS to the Sky token rewards module, store SKY in the protocol’s storage engine to earn yields, or borrow USDS by staking SKY.

SKY tokens are also available for purchase on multiple cryptocurrency exchanges, offering various acquisition options.

Sky Savings Rate (SSR)

The Sky Savings Rate is an automated system that enables users to earn compounded USDS over time. Depositing USDS into the SSR module yields sUSDS tokens, which represent the deposited amount plus accrued interest. The protocol efficiently adds USDS to the pool every few seconds at the prevailing SSR, continually increasing sUSDS value.

sUSDS tokens can be redeemed at any time for the original USDS plus accumulated rewards, providing total flexibility. The SSR fluctuates based on decentralized on-chain governance voting by the Sky community. Smart contracts automatically handle USDS-sUSDS conversions, guaranteeing one-to-one dollar value with zero redemption fees.

Sky Token Rewards (STRs)

USDS holders can participate in the Sky token rewards module to earn SKY governance tokens as incentives. This mechanism strongly encourages active engagement within the Sky ecosystem. Both staked USDS and earned rewards are safeguarded in non-custodial smart contracts, eliminating any third-party asset custody.

Rewards are distributed according to each user’s share of total USDS in the rewards pool and may fluctuate with changes in pool size and issuance rates. By holding USDS and earning SKY, users support Sky ecosystem projects while maintaining full control over their funds and investment choices.

SkyLink

SkyLink is the bridging solution that connects Sky to multiple Layer 2 networks, including Base, Arbitrum, Optimism, and Unichain. It enables seamless transfer of Sky tokens such as USDS and SKY, and access to SSR features without high fees or long wait times.

SkyLink significantly enhances user experience by providing secure, reliable cross-chain bridges. For everyday users, SkyLink streamlines ecosystem access, reducing costs and friction for saving, trading, and earning rewards across multiple blockchains.

Sky Ecosystem and Sky Stars Projects

The Sky ecosystem comprises decentralized, community-driven projects known as Sky Stars. These independent initiatives fuel innovation and fast growth within the broader Sky framework. Each Sky Star project contributes unique capabilities to the ecosystem’s expansion.

Each Sky Star may feature its own governance token, treasury, and community governance structure, all aligned with Sky’s overarching mission. Spark, an on-chain asset distribution initiative deploying stablecoin liquidity across DeFi, CeFi, and real-world assets, is the first official Sky Star project, closely integrated within the Sky ecosystem.

Conclusion

The Sky app represents a major leap forward in decentralized finance, evolving the well-established MakerDAO framework into a more scalable, user-friendly, and community-driven platform. The protocol fuses MakerDAO’s proven best practices with new innovations tailored to the changing market landscape.

With native SKY and USDS tokens, and innovative features like Sky.money, SkyLink, and Sky Stars, the protocol seeks to expand DeFi participation and deliver more reliable, efficient non-custodial financial tools. The Sky app empowers users to take full control of their assets and actively participate in the governance of an advanced, dynamic ecosystem.