Sky Protocol (SKY): how it works, supply and reviews
In short
- Type
- Set of smart contracts on Ethereum that issue stablecoins against collateral
- MKR to SKY rate
- 1 MKR = 24,000 SKY (fixed)
- Risks and caveats
- MKR converts to SKY one way only; reverse needs an external exchange, and late upgrades lose a growing penalty
- Checked
- 31 October 2026
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Key facts
- Ticker
- SKY
- Official site
- sky.money
Key facts checked on 31 October 2026 against official sources.
What is Sky Protocol
Sky Protocol, formerly MakerDAO, is a decentralised protocol on Ethereum that issues the USDS stablecoin (the upgrade of DAI) and is governed by SKY holders (the upgrade of MKR). Users can save USDS through the Sky Savings Rate (sUSDS) or stake SKY.
Network and consensus
| Parameter | Details |
|---|---|
| Type | Set of smart contracts on Ethereum that issue stablecoins against collateral |
| Runs on | Ethereum mainnet; DAI and USDS convert 1:1 there through the DAI USDS converter |
| Launched | Single-collateral Dai launched on Ethereum mainnet on 18 December 2017 |
| Smart contracts | Upgradeable USDS token (UUPS proxy) with permit support |
| Savings | sUSDS is an ERC-4626 vault token that earns the Sky Savings Rate on USDS |
Supply and issuance
| Parameter | Details |
|---|---|
| MKR to SKY rate | 1 MKR = 24,000 SKY (fixed) |
| DAI to USDS rate | 1 DAI = 1 USDS, both ways, no fee |
| SKY for conversions | Governance pre-allocates SKY to the Converter V2 for all outstanding MKR; conversions transfer, not mint |
| Delayed upgrade penalty | 1% penalty on MKR to SKY upgrades from 18 September 2025, plus 1% every 3 months unless governance decides otherwise |
What SKY is used for
- SKY: on-chain governance votes and protocol parameters through the Chief contract
- SKY: deposit in the Staking Engine to borrow USDS, earn rewards or delegate votes
- USDS: stablecoin that can be saved as sUSDS to earn the Sky Savings Rate
Who develops and governs Sky Protocol
- Governance
- SKY holders vote through the Chief contract; executed changes pass through a time-delayed Pause proxy
- Voting portal
- vote.sky.money for SKY votes; the old MakerDAO portal only allows MKR withdrawals
- Front-end operator
- The sky.money web app is provided by Skybase International; disputes go to arbitration in the Cayman Islands
- Open source
- Code in the sky-ecosystem GitHub organisation; docs released under CC0
- Founding team
- MakerDAO was formed about three years before the December 2017 Dai launch
History
| Date | Event |
|---|---|
| 18 December 2017 | Dai stablecoin launched on Ethereum mainnet, governed by MKR holders |
| 2024 | MakerDAO rebranded as Sky; USDS and SKY introduced as upgrades of DAI and MKR (shown on sky.money by October 2024) |
| 12 May 2025 | MKR holders voted in a governance poll on the move to SKY governance |
| 19 May 2025 | Governance upgrade spell executed: SKY replaced MKR in governance, conversion became one-way |
| 18 September 2025 | Delayed upgrade penalty of 1% began for MKR not yet upgraded to SKY |
Security and audits
- Bug bounty programme run on Immunefi
- Public audit reports are indexed by module in the developer docs (e.g. ChainSecurity, Cantina)
- Governance actions pass through a Pause contract whose delay cannot be bypassed
Security incidents
| Date | What happened | Source |
|---|---|---|
| 12 March 2020 | Liquidation shortfall: During the 12-13 March 2020 market collapse and Ethereum congestion, a subset of Maker collateral auctions was won with bids just above zero. Maker says the zero-bid events caused a collateral auction shortfall of about 5.4M+ Dai, covered through MKR debt auctions (20,980 MKR auctioned for 5.3M Dai as of 29 March). | blog.makerdao.com |
Further incidents are reported by third parties (press, incident databases) but are not confirmed in the company’s own channels, so they are not listed here.
Official SKY contracts
| Network | Contract address |
|---|---|
| Ethereum (SKY) | 0x56072C95FAA701256059aa122697B133aDEd9279 |
| Ethereum (MKR-SKY One Way Converter V2) | 0xA1Ea1bA18E88C381C724a75F23a130420C403f9a |
Addresses as listed in the Sky developer docs; the full on-chain registry is published at chainlog.sky.money.
Risks and caveats
- MKR converts to SKY one way only; reverse needs an external exchange, and late upgrades lose a growing penalty
- Smart-contract bugs could lead to loss or freezing of assets, as the protocol's own risk notice states
- The sky.money app geo-blocks some jurisdictions and offers a limited version in others
- Savings and vault rates are variable; sky.money does not set or guarantee them
Official links
- Website: sky.money
- Docs: developers.sky.money
- Source code: github.com/sky-ecosystem
- Governance portal: vote.sky.money
- Governance forum: forum.sky.money
- Contract registry: chainlog.sky.money
- Terms of use: docs.sky.money/legal/skybase-international/terms-of-use
Questions and answers
Is Sky the same as MakerDAO?
Yes. Sky Protocol is the rebranded MakerDAO; SKY and USDS are upgrades of MKR and DAI.
How do I convert MKR to SKY?
MKR converts one way at 1 MKR = 24,000 SKY via the protocol converter; since 18 September 2025 a delayed-upgrade penalty applies, starting at 1%.
Is DAI still usable?
DAI still exists and converts to USDS at 1:1 in both directions with no fee.
Who governs Sky?
SKY holders vote on-chain through the Chief contract; changes execute after a delay through the Pause contract.
Sources
- Sky — homepage
- Sky developer docs — Token and governance upgrade overview
- Sky developer docs — Upgrade timeline
- Sky developer docs — Token holders
- Sky developer docs — Key information
- Sky developer docs — SKY
- Sky developer docs — USDS
- Sky developer docs — sUSDS
- Sky developer docs — Governance
- Sky developer docs — Security measures
- Skybase International — Terms of use
- Skybase International — User risks
- MakerDAO — Dai is now live (archived)
- MakerDAO homepage 2018 (archived)
- sky.money homepage October 2024 (archived)
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