Sky pitches proposal to finalize MKR to SKY token migration

Sky, the leading DeFi protocol formerly known as MakerDAO, is looking to finalize the migration of its governance token from MKR to SKY.

The proposal was published on Sky’s governance forum on May 1 and will be subject to community feedback before being put to an on-chain vote at a later date.

The proposal includes activating SKY staking and USDS rewards for SKY holders, transferring governance processes to SKY-based voting, and disabling migrations from SKY to MKR.

MakerDAO overhauls operations with SKY-MKR pivot

MakerDAO rebranded to Sky in August as part of the protocol’s endgame roadmap, which sought to simplify the project alongside ushering a branding overhaul and introducing new tokens. According to Sky, just 14% of MKR’s supply has been migrated to SKY since the new token went live in September.

Sky also launched a new stablecoin, USDS, which has attracted more than $4 billion worth of migrations. However, more than $3 billion worth of liquidity remains in the form of its original stablecoin, DAI, according to CoinGecko. The stablecoins’ combined market cap ranks third-largest behind Circle’s USD Coin.

Endgame facilitates the protocol’s reorganization into subDAOs called Stars, each of which features a distinct governance mechanism and token. Spark, Sky’s first subDAO, which comprises a fork of the Aave v3 money market protocol, currently boasts a total value locked (TVL) of $4.5 billion, according to DeFillama.

Although Sky ranks as the fourth-largest DeFi protocol with a $6.14 billion TVL, the protocol suffered the heaviest drawdown among the top 10 DeFi projects during April with a 21% dip.

Sky TVL suffered the heaviest drawdown among the top 10 DeFi projects during April with a 21% dip. Source: DeFillama

Sky’s multi-chain expansion

Sky has sought to expand to new networks since undergoing its rebrand, with the project launching USDS on Solana in November. Users quickly migrated nearly $92 million worth of USDS onto Solana by December, with USDS’s market cap on Solana now sitting at $111.4 million, according to Blockanalitica.

Sky followed up by deploying on the Base layer 2 network in January. The move quickly proved successful, with $125 million worth of USDS moving onto Base by the end of March. However, USDS’s market cap on Base has since tumbled by more than half, with $56.7 million worth of USDS currently residing on the network.

Sky also launched on the Arbitrum layer 2 in March. However, adoption has been comparatively sluggish, with users bridging just $20.2 million worth of USDS onto Arbitrum to date.

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