Overview
The Sky Ecosystem represents a decentralized financial structure centered around the USDS stablecoin and the SKY governance token. Its primary objective is to facilitate open and non-custodial access to a variety of DeFi products. This ecosystem empowers users to trade tokens, earn rewards, and engage in governance without losing control over their assets. Among its notable features are Sky Token Rewards, the Sky Savings Rate (SSR), and a framework for decentralized governance. The Sky Protocol, previously recognized as Maker, underpins the Sky Ecosystem, allowing financial transactions using USDS and SKY tokens. By being non-custodial, the protocol ensures that users maintain control over their assets while providing services for trading, saving, and rewards generation. The ecosystem comprises permissionless pools, a stablecoin system, and governance mechanisms, establishing an open and transparent financial framework. SKY functions as the governance token for the Sky Ecosystem, replacing Maker’s MKR token at a ratio of 1:24,000. It allows users to engage in decentralized governance, trade for USDS, and earn rewards through the Sky Token Rewards module. SKY holders can vote on updates and modifications to the protocol, and it is also expected to facilitate the earning of Activation Token Rewards in the future.
Historical Background
The concept of Maker was first unveiled on March 26, 2015, when Rune Christensen released “Introducing eDollar, the Ultimate Stablecoin Built on Ethereum.” This initiative aimed to create a permissionless credit system enabling users to secure loans backed by cryptocurrency assets. On December 10, 2017, Maker’s initial whitepaper, titled “Dai (now Sai) Stablecoin System,” was published. This system employed Collateral Debt Position (CDP) smart contracts, utilizing ether (ETH) as the exclusive form of collateral, leading to the designation of Single-Collateral Dai (SCD), or Sai. While SCD was functional, the vision was to progress toward Multi-Collateral Dai (MCD), which would incorporate additional collateral types. On November 18, 2019, the protocol was upgraded to MCD, allowing Basic Attention Token (BAT) to be introduced as the second collateral option. MCD not only facilitated the use of new collateral forms but also introduced the DAI Savings Rate (DSR), enabling tokenholders to earn yields by depositing DAI into a “Pot” that employs various DeFi strategies, alongside Collateral Auctions to create a competitive market during liquidations. Initially, Maker was developed by the Maker Foundation, which controlled the protocol’s contract at its inception. However, on March 25, 2020, governance was transferred to MakerDAO, a decentralized autonomous organization formed by MKR tokenholders. In March 2021, a governance proposal was introduced to integrate real-world assets (RWAs) into Maker Vaults, with various RWAs, including real estate loans, freight invoices, and silver, being incorporated. Additionally, a discussion forum opened on September 7, 2023, to explore the potential of utilizing approximately $100 million to tokenize T-Bills. As of January 2024, no further developments regarding T-Bills have been reported. The project team established universal governing laws, referred to as the “Atlas Immutable Alignment Artifacts,” for the Maker ecosystem on March 27, 2023, to facilitate ongoing decentralization. On May 12, 2023, MakerDAO unveiled a five-phase roadmap for the project. According to a forum post by Rune Christensen, this new roadmap, called “Endgame,” will be implemented in the following manner:
Phase One (Beta Launch) – This initial phase will rebrand the project, creating a cohesive identity for DAI and Maker while launching two new tokens known as “NewStable” and “NewGovToken.” During this phase, DAI and MKR will remain active, although users will have the option to upgrade both tokens to “NewStable” and “NewGovToken,” respectively. Notably, “NewGovToken” will involve a redenomination of the MKR token supply at a rate of 12,000:1.
Phase Two (SubDAO Launch) – This phase will introduce six SubDAOs funded by emissions from the “NewStable” token. These SubDAOs will serve as decentralized, specialized branches of MakerDAO, enhancing governance efficiency within the ecosystem. They will be classified into “FacilitatorDAOs” and “AllocatorDAOs,” each possessing distinct governance processes for specialized and independent decision-making.
Phase Three (Governance AI Tools Launch) – This stage will unveil AI governance tools designed to modify, enhance, summarize, and interpret “the Atlas,” a governance rulebook outlining all governance processes within the ecosystem. Additionally, Aligned Voter Committees (AVCs) will be introduced, granting tokenholders access to governance and AI tools to make more informed decisions.
Phase Four (Governance Participation Incentive Launch) – This phase will implement the Sagittarius Lockstake Engine (SLE) to encourage user engagement in governance by unlocking “NewStable.” Six farms for SubDAO tokens will also be established, allowing users to earn (farm) “NewGovToken” while engaging in SubDAO governance. Importantly, users with IP addresses from the United States or those utilizing VPNs will be restricted from farming these SubDAO tokens.
Phase Five (NewChain Launch and Final Endgame State) – The final phase will introduce a new blockchain to manage all backend logic for SubDAO tokenomics and ensure the security of MakerDAO governance. Upon its launch, MakerDAO will permanently transition into the Endgame State, where significant alterations will be prohibited, and its core processes and power balance will remain decentralized, self-sustaining, and immutable indefinitely. Rune Christensen proposed on September 1, 2023, that NewChain could ideally be created by forking Solana’s source code, with Cosmos as a secondary option. A commercially reasonable investigation yielded no further information regarding the development of NewChain. As of January 2024, the features outlined in the Endgame roadmap are still in the development phase, with a rollout anticipated to commence in early 2024. In preparation for the onset of Phase One, MakerDAO has approved two proposals (MIP102c2 SP20 and MIP102c2 SP21) aimed at amending the Alignment Artifacts. However, no specific timeline has been provided for the initiation of Phase One. Additional insights regarding Maker’s roadmap are available. As of the same date, Maker and the MKR token remain fully functional, with Core Units elected by MakerDAO tasked with operating as the protocol’s “next-generation workforce.”
