SKY is a native currency of the decentralized Sky Protocol (prev. MakerDAO). It is an upgrade of the governance token on the now-rebranded MakerDAO, MKR. ^[1]

Overview

In August 2024, MakerDAO rebranded to Sky and announced the names of its upgraded tokens, SKY and USDS which holders of its old tokens, MKR and DAI, can switch to. The release of the names followed its confirmation of upgrades to its token ecosystem. ^[1][4]

In September 2024, SKY was launched, joining MKR as a Sky ecosystem governance token. By upgrading MKR to SKY at a rate of 1:24,000, users are able to start their Sky journey with more than just a fraction of the SKY token. ^[1][2]

While only MKR can currently be used to vote onchain for governance proposals, decentralized SKY token voting is around the corner. Users will also soon be able to Activate and Seal their SKY tokens to accumulate Activation Token Rewards. With the Sky Protocol, users can receive rewards without giving up control of their supplied assets. Upgrading is optional. ^[1][2][3]

Utility

SKY serves as a governance token whereby SKY holders can utilize the token to participate in the decision-making process regarding the development and management of the Sky ecosystem. Through a voting process, SKY holders can determine the business logic and risk management parameters for each collateral asset and type of CDP. ^[2]

The governance voting process follows a continuous approval voting method, enabling holders to cast votes for multiple proposals using their MKR holdings. They also have the flexibility to create new proposals or modify their existing votes at any time. ^[2][3]