SkyDAO Is the New MakerDAO: Overhauling How Decentralization Works

Just as Ethereum is the largest platform for decentralized applications, MakerDAO has been one of the oldest players in decentralized finance (DeFi).

DeFi protocol MakerDAO has officially rebranded to Sky, announcing the launch of a new governance token, SKY, and stablecoin USDS, as part of its “Endgame Plan.”

Announced Tuesday, the rebrand is part of a wider effort to overhaul MakerDAO’s governance and tokenomics.

The protocol will launch a new governance token, SKY, and stablecoin USDS on September 18. Both tokens will be available for trading on centralized and decentralized exchanges, including Binance, Coinbase, FTX, Huobi, Kraken, OKX, and Uniswap V3.

At the heart of this transformation is the Endgame Plan, a strategy to overhaul how decentralized governance of the protocol works.

The plan aims to enhance governance and stability, with new tokenomics that will make the system more decentralized and resilient to external threats.

A central component of the Endgame Plan is reorganizing MakerDAO’s structure into “Sky Stars,” which were previously known as SubDAOs.

Each will operate as an independent DAO, with its own governance token, rules, and community. The first of these will be Spark, currently a DeFi lending platform with a total value locked (TVL) exceeding $3 billion.

At the same time, Sky Stars will maintain a synergy with the core protocol, through a network of incentives.

This way, each Sky Star will work within the ecosystem, while maintaining the autonomy to innovate in its area.

To maintain synergy between these Sky Stars and its core protocol, Sky will introduce several changes in tokenomics.

The biggest of these is the change in its burn mechanism.

Under the new framework, the protocol will use its profits to buy liquidity pool tokens: SKY, USDS, and Sky Star governance tokens. Once bought, these tokens will be burned to increase their value.

This way, the protocol aims to align the interests of SubDAOs and the core protocol.

Additionally, the protocol will hold annual SKY minting, the proceeds of which will fund the entire ecosystem.

Specifically, they will incubate new Sky Stars, fund governance committees, and incentivize contributions.

While the entire plan will take some time to implement, it represents a crucial step to creating a more resilient and decentralized governance. If successful, Sky will serve as a model for other decentralized protocols that want to balance decentralization with innovation.