MakerDAO, a DeFi lending protocol built on Ethereum as early as 2014, has a large user base and high popularity in the cryptocurrency field. Its stablecoin DAI currently ranks third in the stablecoin market, second only to USDT and USDC, with a market value of US$5.36 billion.

On August 27, MakerDAO announced a brand change to Sky Protocol and made important upgrades to its governance token MKR and stablecoin DAI. Including, MKR will be upgraded to a new governance token SKY, and DAI will be upgraded to a new stablecoin USDS (Sky Dollar).

MakerDAO’s official Twitter account (X) has also been renamed Sky:

As the leader of the old DeFi lending protocol, why did MakerDAO change its name to Sky? This article will introduce the changes brought about by this upgrade and the significance behind it.

MakerDAO changes its name to Sky. What major changes will it bring?

Governance token: Switch from MKR to SKY

Each MKR can be exchanged for 24,000 SKY tokens. This ratio is fixed, which means that MKR holders will receive a corresponding number of new governance tokens SKY after the conversion. As of press time, the unit price of MKR is about 1913 USDT, and the corresponding unit price of SKY after the split is 0.0797 USDT.

Stablecoins: Switching from DAI to USDS

The exchange ratio between DAI and USDS is 1:1, ensuring the continuity of the stablecoin value. Users can choose to exchange DAI directly for USDS. In addition, users can also seamlessly exchange ETH, USDC, and USDT for USDS on the official website. The exchange will start on September 18.

It is worth noting that the upgraded USDS will have a freezing function, which is not available on DAI before. This also means that USDS has added some centralized features on the basis of decentralization. When encountering problems such as transfer errors or theft, users can seek help from MakerDAO (Sky) to freeze the relevant addresses.

Users can voluntarily exchange

According to the official introduction, this token upgrade is voluntary. Users can choose whether to convert their MKR and DAI to new tokens. This gives community members more options. For users holding MKR, they will maintain the corresponding governance rights after converting to SKY. Sky promises that the new governance model will be more efficient and transparent. In addition, DAI and MKR will remain in circulation unchanged, and the new tokens will exist in parallel.

In addition, in order to encourage more users to participate, the team has launched a special reward mechanism: users who complete token migration during the beta period will receive 1.25 times the SKY and USDS token rewards.

Maker SubDAO will also be renamed Sky Stars

As part of the rebrand, Maker SubDAO will be renamed Sky Stars, remaining an independent decentralized project that connects the Sky ecosystem through its unique business model and autonomy.

The first such subDAO to go live is Spark, an open-source decentralized liquidity protocol that currently offers a 6% yield to users who deposit DAI tokens, while allowing users to borrow USDS at a 7% interest rate.

According to DefiLlama data, there are currently 443 DeFi lending protocols with a total locked value (TVL) of more than $31.3 billion, ranking second only to liquidity staking protocols.

Of these 443 lending protocols, Spark currently ranks third with a total locked value (TVL) of $2.43 billion, down nearly 24% over the past month. Aave remains the leading DeFi lending protocol with a total locked value of $11.15 billion, down more than 16% over the past month.

Why did MakerDAO change its name after running for ten years?

MakerDAO co-founder Rune Christensen said in a recent interview that the rebranding is a key step in the "next evolution of DeFi". Sky Protocol is built with a focus on simplicity and ease of use, allowing users to enjoy innovative features such as Sky Token Rewards (STRs) and Sky Savings Rate (SSR) in eligible jurisdictions.

First, with the increasingly stringent regulatory environment, especially in the United States, decentralized stablecoins face unprecedented challenges. In order to meet these challenges, MakerDAO needs to reposition itself. Changing its name to Sky can help the project gain greater flexibility in the new regulatory environment and avoid the limitations brought by its past identity.

Secondly, the name change is not only a change in the brand, but also represents a comprehensive innovation of the underlying technical architecture. MakerDAO plans to improve the overall performance of the protocol by improving smart contracts, optimizing governance mechanisms, and enhancing the scalability of the system. In order to reflect this thorough technological change, adopting a new brand image is essential.

Third, in order to attract a wider range of users, especially those who are not familiar with cryptocurrencies, simplifying brand recognition is crucial. The original "MakerDAO" name may seem complicated and difficult to understand for outsiders, while "Sky" is more concise and easy to remember, which will help to promote and popularize stablecoins more widely.

In general, the name change to Sky not only helps MakerDAO adapt to regulatory and technological changes, but also effectively expands its user base. Through this series of changes, Sky Protocol may hope to lead the next innovation and development in the DeFi field.