Author: Nancy, PANews
After two years, the veteran DeFi project MakerDAO has finally upgraded to a new stage according to the original Endgame plan. On August 27, MakerDAO announced that it would change its brand name to Sky Protocol and launch a new stablecoin USDS and governance token SKY. Although there are many DeFi protocols that have been rebranded, and PANews has previously counted 15 renamed Web3 projects, MakerDAO's transformation and upgrade has plunged it into a controversial vortex of compliance supervision and decentralization.
Rebranded to Sky, token upgrade to be deployed on September 18
The MakerDAO protocol announced that it has officially changed its name to Sky, aiming to promote the popularization of DeFi and simplify the user experience. As part of the upgrade, Sky will launch a new stablecoin USDS and governance token SKY on September 18. Among them, the existing DAI stablecoin and MKR governance token will continue to exist, and users can voluntarily upgrade their tokens.
According to the exchange rules, DAI can be exchanged for USDS at a 1:1 ratio, and each MKR token can be exchanged for 24,000 SKY tokens; the token rewards of the governance token SKY will be distributed to the holders participating in the USDS at a rate of 600 million SKY per year, and the Sky token has also launched a double "early bird" reward activity. As of September 18, users on the new platform Sky.money can get double rewards by providing USDS to the Sky Token reward module.
At the same time, MakerDAO also launched a new DeFi application and website Sky.money (maintained by an independent entity Skybase, owned by a company related to MakerDAO co-founder Rune Holdings), providing key functions of the Sky protocol, and launched a multi-chain solution Skylink to support the migration of Sky ecosystem tokens such as USDS and SKY to the main L2.
MakerDAO's SubDAO was also renamed Sky Stars, the first of which is Spark, a Sky-based lending platform that focuses on providing high-quality, easy-to-use DeFi products. MakerDAO co-founder Rune Christensen said that Stars has real users and the ability to generate value, which can truly promote innovation and creativity.
Regarding this upgrade, Rune said, “This name change is a step towards the ‘next evolution of DeFi.’ The rebranding will not change the core nature of MakerDAO or DAI, but will only make the governance mechanism of the protocol immutable and fully decentralized.”
According to the official website, only about 1,550 users have completed the token conversion through Sky's migration tool. And Coingecko data shows that in the past 24 hours, the price of the token Maker has fallen by 7.6%. Although it is also affected by the overall market decline, MakerDAO's major product updates have not brought any boost to its price.
Freeze function causes controversy, DAI is in a dilemma of weak growth
However, the community has mixed opinions on MakerDAO's upgrade. On the one hand, since MakerDAO has established a high reputation in the DeFi community, the name change is considered to have damaged the brand value. In addition, the official did not properly handle the original X account, resulting in other accounts being registered, or there is a risk of phishing.
On the other hand, according to Sam MacPherson, CEO of Phoenix Labs and Spark Protocol (the relevant message has now been deleted), DAI will introduce a freezing function after the upgrade to USDS, similar to centralized stablecoins such as USDT and USDC.
At the same time, the upgraded Sky official website of MakerDao is suspected to block some areas on the front end and prohibit the use of VPN to log in. Compared with the previous anti-censorship of DAI, this change is considered by the community to violate the original intention of DeFi decentralization, and the gate of decentralized stablecoins has been "lost".
In response, Rune explained in a tweet that USDS did not have a freezing function when it was launched, and that it would decide how to implement a similar freezing function based on all data in subsequent governance, and find a way to prevent as many risk factors as possible. The upgrade is optional, DAI will still operate, and only USDS will have a freezing function. In other words, DAI and USDC will coexist.
In fact, according to CoinGecko data, it has been declining since it reached a peak of US$9.87 billion in February 2022, and has fallen by more than 45.5% so far. Although DAI's market value ranks third, it is only 4.5% of the first-ranked USDT and 15.5% of the second-ranked USDC. And in terms of growth rate, as of August 28, DAI's market value has fallen by about 2.1% at the beginning of this year. In contrast, USDT's market value has continued to expand, rising by 28.7% this year alone, and USDC's scale has also expanded by nearly 40.3% during the same period.
In fact, it is not just DAI, the entire decentralized stablecoin is facing growth difficulties, because the lack of compliance makes it impossible for mainstream institutions to use it, and the application scenarios are limited. In contrast, the market size of centralized stablecoins has been greatly developed and growing rapidly. DeFiLlmama data shows that as of August 28, only USDT and USDC, the two major centralized stablecoins, have divided over 89.7% of the market share.
With the upgrade of DAI, USDS will start to compete with centralized stablecoins in the future. This innovation is also reasonable for MakerDAO, especially after the bear market achieved considerable growth thanks to the rise in US Treasury bond interest rates during the interest rate hike cycle. Now MakerDAO may face profit difficulties due to the start of the interest rate cut wave.
