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What is Sky (SKY)?

Sky Protocol is a next-generation decentralised finance (DeFi) platform built to simplify saving, governance, and stablecoin management. It provides users with non-custodial access to DeFi tools that are designed to be more scalable, user-friendly, and transparent.

At its core, the protocol features USDS, a USD-pegged stablecoin that replaces DAI, and SKY, the governance and utility token that powers the ecosystem. Together, they form the foundation of a modern DeFi network focused on decentralised governance, on-chain yield, and cross-chain accessibility.

The Sky Protocol architecture introduces Sky.money, a non-custodial interface that allows users to manage savings, staking, and governance directly on-chain. The protocol operates primarily on Ethereum, with interoperability across other major networks like Cardano, and integrates a Layer-2 infrastructure known as SkyLink to deliver faster and more cost-efficient transactions.

SKY plays a central role in protocol governance and ecosystem alignment. Token holders vote on key parameters such as collateral types, stability fees, savings rates, and system upgrades through the decentralised Sky.DAO.

How does Sky work?

Sky Protocol operates as a modular DeFi ecosystem that unites savings, governance, and yield-generation under a single, accessible framework.

Core components include:

• USDS Stablecoin: A fully decentralised, USD-pegged stablecoin that enables stable savings and lending.
• Sky Savings Rate (SSR): A built-in yield system that allows USDS holders to earn returns directly on-chain.
• Staking Engine: Enables SKY holders to stake their tokens to earn rewards, delegate governance power, and participate in protocol decisions.
• SkyLink Layer-2: A fast and cost-efficient network extension that improves scalability and transaction efficiency.
• Sky.DAO: The governance layer where SKY holders vote on proposals and manage protocol parameters such as fees, collateral, and system updates.

Together, these elements make Sky a flexible and transparent alternative to traditional finance, empowering users to participate in a truly decentralised economy.

SKY Token Utility

SKY serves as both the governance and economic engine of the Sky ecosystem. Its primary roles include:

• Governance: Voting on system upgrades, parameter changes, and protocol decisions through Sky.DAO.
• Staking & Rewards: Earning incentives via staking, delegation, and participation in Sky Token Rewards (STRs) and Activation programs.
• Savings & Lending: Accessing yield on stablecoin deposits through the Sky Savings Rate (SSR) and borrowing via the Spark lending platform.
• Cross-Chain Access: Leveraging the SkyLink Layer-2 system to perform fast, low-cost DeFi transactions.
• Ecosystem Participation: Supporting modular sub-projects and partnerships such as Spark, LCX Exchange, and Skybase International.

These utilities position SKY as a cornerstone asset across DeFi, DAO governance, stablecoin-based finance, and institutional-grade decentralised systems.

What is the history of Sky (SKY)?

Sky Protocol originated from MakerDAO, one of the pioneering projects in decentralised finance. In 2024, the MakerDAO community initiated a full system transition, introducing USDS as the new stablecoin and SKY as the governance token to replace DAI and MKR.

The rebrand marked a shift toward a modular, more inclusive system focused on accessibility, scalability, and long-term sustainability. The redenomination of MKR to SKY allowed broader governance participation, while the introduction of Sky.money and SkyLink improved usability and network efficiency.

Since then, Sky has evolved into a global, community-driven DeFi ecosystem, combining the stability of USDS, the governance power of SKY, and a growing network of integrated products and partners that together represent the next evolution of decentralised finance.