Key takeaways

• SKY and USDS are the native tokens of the decentralized Sky protocol, representing enhanced versions of MakerDAO's MKR and DAI.

• USDS is a soft-pegged stablecoin, backed by assets, designed to maintain a value equal to or close to one US dollar.

• You can trade, save, enhance tokens, stake SKY, and earn rewards while maintaining full control of your funds.

• Sky.money is the non-custodial gateway providing 24/7 access to trading, saving, staking, and governance features of the Sky protocol.

What is Sky?

Formerly known as MakerDAO, Sky is a decentralized finance (DeFi) platform that has evolved to offer a more scalable, user-friendly, and community-governed solution. Sky builds on MakerDAO's legacy by introducing enhanced native tokens, new features, and a streamlined governance system focused on resilience and simplicity.

The protocol consists of two key tokens: USDS, a dollar-pegged stablecoin, and SKY, the governance token. Sky.money is the main gateway for interacting with the protocol while retaining full control of your assets.

How Sky Works

The Sky protocol offers a range of financial services, including trading, saving, and earning rewards, built on an open and transparent infrastructure. The protocol operates on liquidity pools without permission and a stablecoin system combined with decentralized governance, meaning there is no intermediary controlling your money or decisions.

SKY and USDS are the two native tokens of the Sky protocol:

• USDS: the stablecoin of the decentralized Sky protocol and the improved version of DAI. It is supported by excess collateral and is softly pegged to the US dollar, aiming to maintain a value equal to or close to one dollar.

• SKY: the native governance token of the Sky protocol and its ecosystem, an improved version of MakerDAO's MKR token. It plays a crucial role in decentralized governance, staking, and rewarding active participation within the ecosystem.

Access the Sky protocol with Sky.money

Sky.money is the non-custodial gateway that connects you to the Sky protocol. It allows trading of popular tokens and tokens from the Sky ecosystem. You can convert DAI to USDS and MKR to SKY and access saving and reward features through the platform. You can also participate in the Sky Savings Rate (SSR; 'Sky Savings Rate') to earn additional USDS or access SKY token rewards via the Sky.money app.

You can via the app:

• Convert MKR tokens to SKY at a rate of 1 MKR for 24,000 SKY.

• Trade USDC, USDT, ETH, or USDS directly in exchange for SKY.

• Earn SKY rewards by providing USDS to the Sky token rewards module.

• Staker of SKY tokens in the Sky protocol's staking engine to earn rewards.

• Borrow USDS by staking SKY tokens.

You can also buy SKY on cryptocurrency exchange platforms like Binance.

Sky Savings Rate (SSR)

The Sky Savings Rate is an automated system that allows you to earn compounded USDS over time. When you deposit USDS into the SSR module, you receive sUSDS tokens that represent your stake and any earned value. USDS tokens are added to the pool every few seconds based on the current SSR rate, thereby increasing the value of sUSDS.

You can exchange your sUSDS at any time for original USDS plus accumulated rewards. The SSR rate fluctuates based on decisions made by the Sky ecosystem's governance community through a decentralized vote on the blockchain. The smart contracts automatically manage the conversion between USDS and sUSDS, ensuring they maintain an equal dollar value without fees during the exchange.

Sky Token Rewards (STR)

USDS holders can participate in the Sky token rewards module to earn SKY governance tokens as a reward. Lent USDS and earned rewards are secured in non-custodial smart contracts, ensuring that no third party holds the assets. Rewards are distributed based on each user’s share of the total USDS held in the rewards pool and may vary based on changes in pool size and issuance rates. By holding USDS and earning SKY rewards, you can support projects in the Sky ecosystem while retaining full control of your funds.

SkyLink

SkyLink is the bridge system that connects Sky with several layer 2 networks such as Base, Arbitrum, Optimism, and Unichain. It allows you to move your Sky tokens like USDS and SKY, and use features like the Sky Savings Rate without paying high gas fees or waiting long for transactions to complete. SkyLink enables everyday users to interact with the Sky ecosystem more smoothly and cost-effectively, allowing them to save, trade, and earn rewards more efficiently across multiple blockchains.

The Sky ecosystem and Sky Stars

The Sky ecosystem is a community network of decentralized projects known as Sky Stars. These independent projects foster rapid innovation and growth within the broader framework of Sky. Each Sky Star can have its own governance tokens, treasury, and community governance, while aligning with the overall goals of the Sky ecosystem. Spark, an asset allocator on the blockchain that deploys liquidity in stablecoins across DeFi, CeFi, and real assets, is the first official Sky Star and will closely integrate into the Sky ecosystem.

Conclusion

The Sky protocol represents a significant advancement in decentralized finance by evolving the well-known MakerDAO ecosystem into a more scalable, user-friendly, and community-governed platform. With its native tokens, SKY and USDS, as well as innovative features like Sky.money, SkyLink, and Sky Stars, the protocol aims to broaden participation in DeFi and create more reliable non-custodial financial tools.

For more information

• What is a stablecoin?

• What is the stablecoin trilemma?

• What is Spark (SPK)?

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