SkyPrice

(SKY1)

Sky is a decentralized finance (DeFi) protocol that evolved from MakerDAO's 2024 rebrand. This transformation aimed to improve scalability, usability, and governance. MakerDAO, a highly influential DeFi project, rebranded to Sky with the goal of simplifying its brand, increasing accessibility, and fostering decentralized growth. The co-founder of Sky, Rune Christensen, was also the driving force behind the original MakerDAO initiative.

Sky operates with two main cryptocurrencies. USDS (Sky Dollar) is its primary stablecoin, designed to maintain a peg to the US Dollar, replacing DAI. Users generate USDS by locking crypto assets, such as ETH, in smart contracts called Collateralized Debt Positions (CDPs). The SKY Token is the governance and utility token of the protocol, which superseded MKR (MakerDAO's original token) at a conversion rate of 1 MKR to 24,000 SKY. Holders of SKY participate in critical decision-making.

Sky's core operation centers on generating its stablecoin. Users deposit Ethereum-based assets into smart contracts, known as Vaults or CDPs, to generate USDS against this collateral. The stability of USDS is maintained through various mechanisms, including stability fees charged on borrowed USDS. These fees help discourage excessive minting and contribute to preserving its peg to the US Dollar. This system effectively functions as a decentralized loan mechanism managed entirely by smart contracts.

The SKY token empowers holders to engage in decentralized governance, allowing them to vote on proposals that shape the protocol's future, such as changes to collateral types and stability fees. It also plays a crucial role in risk management; new SKY can be created and sold to stabilize the system in scenarios of undercollateralization. Additional benefits for holders include access to reward programs and participation in the Sky Savings Rate.

The Sky protocol platform is non-custodial, meaning users maintain control of their private keys, which reduces custodial risks associated with centralized services. However, inherent risks common to DeFi protocols still exist, such as potential smart contract bugs, technical vulnerabilities, or unforeseen governance missteps. Due to its recent rebrand and short trading history, additional risks include volatility, liquidity, demand fluctuations, potential forking, cryptography challenges, regulatory changes, concentration risks, electronic trading risks, and cybersecurity threats.

Sky Stars are independent, decentralized projects operating within the Sky ecosystem. They are designed for focused, rapid innovation and expansion, acting as gateways to the broader Sky Protocol. Spark, for instance, is highlighted as the first Sky Star and a popular DeFi lending application. SkyLink is a distinct innovation focused on achieving faster transactions. It leverages Ethereum Layer 2 solutions to enhance the overall robustness and usability of the protocol.