MakerDAO’s transition to Sky protocol, introduces USDS and SKY tokens

The decentralized finance platform MakerDAO has been rebranded into Sky protocol, improving its functionalities. According to an official announcement, its tokens also got new names: DAI stablecoin, now USDS, while the MKR token changed to SKY.

The rebranding marks another phase in the “Endgame” plan to restructure the protocol. Following the rebrand, users can upgrade their DAI and MKR to the new tokens. USDS will remain an algorithmic stablecoin pegged to the US dollar, but each MKR will be worth 24,000 SKY. MKR is currently trading at $2,120.

Tokens upgrade is optional but offers more benefits

The upgrade of DAI and MKR tokens will become available by September 18, but holders can already sign up for early bird rewards. MakerDAO has made the upgrade voluntary and plans to keep the DAI and MKR tokens as legacy tokens on the Sky Protocol.

Nevertheless, most users will likely upgrade as the new tokens come with more rewards. According to the announcement, USDS holders get SKY tokens as rewards in some jurisdictions. With time, more features will likely be announced for the new tokens.

In addition to the change in tokens, MakerDAO now has a new Defi application and website, Sky.money, which will replace Makerdao.com. However, the protocol founder, Rune Christensen, has said the rebrand does not change the core essence of MakerDAO or DAI; it will only make the protocol’s governance mechanisms immutable and allow it to become fully decentralized.

He said:

“Like MakerDAO before it, the Sky Protocol is decentralized, community-governed, permissionless, and non-custodial, with users free to withdraw their funds at any time.”

Meanwhile, another key change to the protocol is the rebranding of Maker SubDAOs to Sky Stars. Maker SubDAOs are independent protocols within the MakerDAO ecosystem, and the lending platform Spark protocol is already an existing SubDAO. With the rebrand, it will become the first Sky Star.

MakerDao’s Sky website is unaccessible with a VPN

The crypto community has reacted positively to the rebranding, judging by MKR’s performance after the announcement. The token rose almost 4% today before flatlining, going from $2,037 to $2,165. This contrasts with the rest of the market, where major cap assets, including Bitcoin, Ethereum, and Solana, fell in value.

However, some users have criticized the new platform for banning VPNs. Defillama founder 0xngmi first observed that Sky.money has a VPN blocker that automatically blocks anyone using a VPN from accessing the protocol. MakerDAO.com did not have a similar feature.

Many in the crypto community believe this defeats the whole purpose of decentralization and would prevent many people from accessing it. This effectively means Sky has limits. This is likely a deliberate move by MakerDAO to avoid legal liabilities, as its Spark protocol also has  VPN blockers.

In response to the critics, Christensen said, “The good news (or the bad news, depending on your expectations) is that websites are not DeFi.”