MakerDAO has rebranded to Sky and announced the names of its upcoming upgraded tokens, USDS and SKY, set for September 18. The release of the names follows its recent confirmation of upgrades to its token ecosystem.

The rebranding is a part of MakerDAO's “Endgame Plan,” a vision outlined by co-founder Rune Christensen aimed at transforming the DAO's structure to enhance DeFi's growth, accessibility, and resilience. At the heart of this transformation is the introduction of new tokens—USDS, an upgraded version of the DAI stablecoin, and SKY, the new governance token replacing MKR.

Sky's launch aims to facilitate a shift towards simplifying the DeFi user experience, with a focus on making the protocol more accessible to a broader audience. The rebranding also introduces a novel concept called “Sky Stars,” which are independent decentralized projects within the Sky ecosystem. These Sky Stars, starting with the Spark protocol, are designed to stimulate rapid innovation while maintaining autonomy within the larger Sky framework.

As per the announcement, USDS will function as an upgradable version of DAI, enabling users to convert their existing DAI holdings into the new stablecoin. Similarly, MKR holders will have the option to upgrade their tokens to SKY, with each MKR converting into 24,000 SKY tokens. The upgraded tokens will offer enhanced functionalities, including access to the Sky Savings Rate (SSR) and Sky Token Rewards (STRs), designed to incentivize user engagement within the protocol.

In tandem with the rebranding, a new platform called Sky.money will be launched to facilitate non-custodial access to the Sky protocol. However, it’s important to note that some features, such as the SSR and STRs, will be subject to limitations in specific jurisdictions due to regulatory considerations.

MakerDAO's transition to Sky is presented as a fundamental shift intended to broaden DeFi's unique advantages. As Christensen pointed out, the evolution to Sky signifies a move toward a more robust and user-friendly decentralized financial infrastructure, capitalizing on the success and security of the Maker protocol to propel the next phase of DeFi development.

Rebranding amid DeFi tensions

In 2024, MakerDAO has faced growing tensions with Aave. This discord stems from MakerDAO’s decision to back a significant portion of DAI with Ethena Labs’ synthetic dollar, USDe, a move seen as high-risk by some in the DeFi community.

Aave expressed concerns over MakerDAO’s governance actions, which are perceived as increasingly aggressive and unpredictable. This led to a proposal from Aave to stop supporting DAI as collateral on its platform, citing potential contagion risks associated with MakerDAO’s new direction. The proposal reflected a broader unease within the DeFi sector about the systemic risks posed by USDe, drawing parallels to past stablecoin failures like the Terra/Luna crash.

As MakerDAO continues to navigate these challenges, its future direction will likely have significant implications for the broader DeFi ecosystem.

The rebranding of Maker to Sky and the introduction of USDS and SKY tokens are strategic moves designed to enhance the protocol's functionality, accessibility, and resilience, positioning it for long-term growth in the evolving DeFi landscape.