Sky Protocol Approves Major Governance And Operational Updates Including SKY Staking Overhaul And Increased Buybacks

In Brief

Sky Protocol’s governance vote approved a set of updates, including a revised SKY staking reward model, increased buybacks, treasury funding, and multiple protocol enhancements.

Decentralized and non-custodial financial protocol Sky confirmed that an executive vote has approved a new proposal introducing several operational updates

The approved changes include replacing the existing SKY → USDS staking reward structure with a SKY → SKY reward model, requiring stakers to manually migrate their positions to the updated system. The proposal also increases the daily SKY buybacks to a total of 300,000 USDS and transfers 500 million SKYto the protocol treasury to support future staking rewards

According to the announcement, these updates are scheduled for execution on November 3rd, 2025, at 14:37 UTC.

In a proposal released the previous week, Sky outlined a broader set of technical and governance adjustments intended to enhance the protocol’s efficiency and financial stability. The proposal includes enabling SKY rewards for SKY stakers, activating a revised Treasury Management Function designed to fund the Core Council Buffer and Aligned Delegates Buffer, and updating the Atlas system to integrate a new Kicker Module that ensures the Smart Burn Engine continues to function even when the Surplus Buffer is negative. Additional updates involve adding capital contribution listings for Genesis Agents, moving the implementation of Stage 2 in the Monthly Settlement Cycle to November 1st, 2025, and introducing initial parameters for the soft launch of the ASC system.

Further modifications include implementing StarGuard, a new module that enables the execution of Prime Spells independently from Sky Core Spells, as well as adding logic for the Relay and Freezer multisignature wallets within the Grove Liquidity Layer. The proposal also removes temporary restrictions on Grove’s investments in platforms such as Aave Core v3 RLUSD, Aave Horizon USDC, and Aave Horizon RLUSD. It provides for the organization of supporting documents so that each version corresponds directly to a single primary document, streamlining future upgrades to the Atlas. Lastly, terminology in the Atlas has been revised to reflect the ongoing shift of responsibilities from Scope Facilitators to Executor Agents.

Holders of the SKY token participated in the governance process by casting votes on whether to implement these protocol amendments. Prior to the vote, a period of community discussion and debate took place to assess the implications and ensure transparency within the decision-making process.

Sky Protocol Emerges From MakerDAO Evolution

MakerDAO ecosystem has undergone a major transformation and now operates under the name Sky Protocol. The change reflects a comprehensive structural revision of one of the longest-running decentralized finance (DeFi) platforms. Originating from MakerDAO’s development of the decentralized stablecoin DAI and the governance token MKR, Sky Protocol introduces a new framework built around updated core tokens, a more efficient governance model, a modular system design, and expanded functional capabilities intended to enhance scalability and accessibility across the network.

Recently, the protocol confirmed the launch of a large-scale token repurchase initiative, utilizing its stablecoin USDS to buy back SKY tokens from the market. During August, approximately 5.5 million USDS was allocated for the acquisition of around 73 million SKY tokens. The repurchase activity has been associated with a subsequent increase in the market value of SKY, with reports noting an approximate eight percent rise following the implementation of the program.