- MakerDAO rebrands to Sky, signaling a new direction.
- Sky launches ‘Endgame Plan’ for decentralized governance.
- The goal is to make protocol resilient to external risks.
Just as Ethereum is the largest platform for decentralized applications, MakerDAO has been one of the oldest players in decentralized finance (DeFi). The Ethereum-based lending protocol, best for its stablecoin DAI, is now rebranding to Sky.
This rebrand is part of the “Endgame Plan,” an ambitious proposal to overhaul MakerDAO’s governance and tokenomics. This rebrand and the accompanying launch of the USDS and SKY tokens on September 18th signal the beginning of this new phase.
Sky’s Endgame Plan: Overhauling How Decentralization Works
MakerDAO is launching a new phase to create a more resilient and scalable DeFi ecosystem. On Tuesday, August 27, the protocol officially rebranded to Sky and announced the launch of a new governance token, SKY, and stablecoin USDS.
At the heart of this transformation is the Endgame Plan, a comprehensive strategy to overhaul the protocol’s decentralized governance. The plan aims to enhance governance and stability, with new tokenomics designed to make the system more decentralized and resilient to outside threats.
How Sky’s New Governance Will Work
A central component of the Endgame Plan is reorganizing MakerDAO’s structure into “Sky Stars,” formerly known as SubDAOs. Each will work as an independent DAO with its own governance token, rules, and community. The first of these will be Spark, currently a DeFi lending platform with a total value locked (TVL) exceeding $3 billion.
At the same time, Sky Star will maintain synergy with the core protocol through a network of incentives. This way, each Sky Star will work within the ecosystem while maintaining the autonomy to innovate in its area.
How Sky’s New Tokenomics Will Work
To maintain synergy between these Sky Stars and its core protocol, Sky will introduce several changes in tokenomics. The biggest of these is the change in its burn mechanism.
Under the new framework, the protocol will use its profits to buy liquidity pool tokens: SKY, USDS, and Sky Star governance tokens. Once bought, these tokens will be strategically burned to increase their value. This way, the protocol aims to align the interests of SubDAOs with those of the core protocol.
Additionally, the protocol will hold annual SKY minting, the proceeds of which will fund the entire ecosystem. They will incubate new Sky Stars, fund governance committees, and incentivize contributions.
While the entire plan will take some time, it is crucial to create a more resilient and decentralized governance. If successful, Sky will serve as a model for other decentralized protocols that want to balance decentralization with innovation.
On the Flipside
- Sky’s decentralized structure and new tokenomics conflict with regulations in certain countries. Certain features, such as rewards for USDS and SKY holders, will be restricted in jurisdictions like the U.S. and U.K.
- Sky’s new stablecoin will have to compete with giants like Tether.
Why This Matters
MakerDAO’s rebrand to Sky signals a complete change in its governance, If successful, other projects will learn from its decentralized structure.
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