Sky (MakerDAO) Explained: The Complete Guide

What is Sky?

Sky (Sky is the rebranded MakerDAO, issuing the over-collateralized stablecoin USDS and the SKY governance token, with a governance-set savings rate via sUSDS) is the rebranded MakerDAO: in August 2024 MakerDAO became Sky, with USDS replacing DAI, SKY replacing MKR (at 1:24,000), and a SubDAO structure called "Stars." By Q1 2026 USDS had grown to $11.7B in supply, making Sky the third-largest stablecoin issuer globally behind Tether and Circle. Last verified: 2026-05-31.

MakerDAO invented decentralized over-collateralized stablecoins with DAI. The Sky rebrand is part of its long-planned "Endgame": simpler products, a clearer token, and a network of semi-independent "Stars" building on the core. The original DAI and MKR still exist and upgrade to USDS (1:1) and SKY (1 MKR = 24,000 SKY) — nothing forces migration on-chain. However, the exchange migration accelerated in 2026: Binance auto-converted all exchange-held DAI to USDS on April 7, 2026; Coinbase followed on May 4–6, 2026. Roughly $4.4B DAI remains in on-chain circulation. New features, the savings rate, and Star incentives all center on the Sky tokens.

The Sky short answer

1. It's MakerDAO, rebranded. USDS = DAI's successor; SKY = MKR's successor; same battle-tested core.
2. sUSDS is the easy yield. Deposit USDS, hold sUSDS, earn the governance-set Sky Savings Rate — no lockup. Rate was 3.75% APY as of March 31, 2026.
3. The peg is defended three ways. Over-collateralization, the PSM (USDC swap 1:1), and the savings-rate lever.
4. Yield comes from RWAs + lending + stability fees. Backed by tokenized Treasuries, on-chain loans, and crypto — set by vote, so it's steadier than demand-driven rates.
5. The trade-offs are real. RWA off-chain risk, ~38% USDC backing via PSM, and a USDS freeze function not present in DAI.

🔴 Live: Incentives & Yield How-Tos

Last updated 2026-05-31 — we refresh this section as campaigns change. Confirm the current rate at sky.money/susds or info.sky.money.

SKY and USDS are live. The main opportunity is yield: the Sky Savings Rate via sUSDS, SKY staking rewards, and the token programs that Stars like Spark periodically run.

What's live right now (May 2026)

• Sky Savings Rate (sUSDS). Deposit USDS, hold sUSDS, and earn the governance-set rate — 3.60% APY as of late May 2026 (governance cut the rate from 3.75% on May 26, 2026, having held 3.75% at the Q1 2026 close per Sky's financial report), sourced from RWA loans, on-chain lending, and stability fees. sUSDS is currently the largest rate-bearing stablecoin globally at $6.49B outstanding. No lockup, no LPing. The redemption ratio was approximately 1.094 USDS per sUSDS as of April 2026.
• SKY staking. Stake SKY to earn governance rewards and to borrow USDS against your staked position.
• Spark programs. Spark (Sky's flagship Star) launched its SPK governance token in June 2025 — 10B tokens at genesis, with 35% allocated to the Spark ecosystem and 65% to Sky for a 10-year farming campaign. Spark's TVL exceeded $5B by 2026. Watch for ongoing SPK farming rounds.
• Developer integrations. The Sky Savings Rate became available to all Privy (Stripe company) developers in March 2026, extending sUSDS access to consumer apps. The SSR follows the ERC-4626 standard — deposit USDS, receive sUSDS shares.

How to participate, step by step

1. Get USDS (swap on a DEX, or upgrade DAI 1:1 at Sky.money) and deposit into the savings module for sUSDS.
2. Hold sUSDS to accrue the savings rate automatically.
3. Stake SKY for governance rewards and optional USDS borrowing.
4. Watch Star programs (e.g. Spark) for ecosystem incentives including ongoing SPK farming.

Caveat: The Sky Savings Rate is set by governance and can change. Always verify the current rate at sky.money before sizing in — the 12-month range has spanned roughly 3.60% to 9.0%.

For more on stablecoin yield, see our best stablecoins and best crypto savings accounts guides.

How Sky works

USDS is over-collateralized by a diversified portfolio of RWA loans, on-chain lending, and crypto collateral; depositing USDS into the savings module mints sUSDS, whose value rises at the Sky Savings Rate set by SKY governance. Last verified: 2026-05-31.

The model is the one MakerDAO pioneered: collateral is locked to mint the stablecoin, kept over-collateralized so USDS holds its peg. What's grown is the collateral mix — broken down as approximately 38% USDC (via PSM), 25% crypto-collateralized loans (ETH, wstETH, wBTC), 22% RWA loans (tokenized credit and Treasuries), and 10% Spark Protocol allocations, with the rest in miscellaneous lending. Because the rate is governance-set rather than purely market-driven, it's steadier than a typical DeFi yield. Sky's Q1 2026 gross revenue hit a record $123.79M with a $46M net surplus.

How the peg holds (and where the yield comes from)

USDS stays at $1 through over-collateralization, the PSM's 1:1 USDC arbitrage, and the savings-rate demand lever; the yield comes from stability fees on minted USDS plus returns on RWA and lending collateral. Last verified: 2026-05-31.

Three forces keep USDS pegged:

• Over-collateralization. Every USDS is backed by more than $1 of collateral; positions that fall below their threshold are liquidated, protecting the system.
• The PSM (Peg Stability Module). Users swap USDC for USDS 1:1 and back. If USDS drifts above $1, arbitrageurs mint cheaply and sell it down; below $1, they buy and redeem — snapping it back. This is why USDS holds peg tightly, and also why approximately 38% of USDS backing is USDC — USDS partly inherits Circle's risk.
• The savings rate. Raising the SSR pulls demand into USDS; lowering it releases demand — a governance dial on the peg.

Where does the yield come from? Borrowers pay stability fees on USDS minted against collateral (5.5–8% on crypto vaults), and the protocol earns returns on its RWA positions (5–6.5% on tokenized credit) and the Spark allocation. Sky routes a portion of that revenue into the savings rate paid to sUSDS holders — which is why a governance-set, revenue-backed rate is steadier than a pure supply/demand DeFi yield.

Important distinction: unlike DAI, USDS includes a freeze function that can block balances for compliance or legal reasons. DAI never had this feature. This is a meaningful centralization trade-off introduced with the Sky rebrand.

Worked example: earning with sUSDS

Numbers show why sUSDS is one of the simplest dollar yields in DeFi — deposit, hold, and the redemption ratio rises. Last verified: 2026-05-31.

Suppose you hold $10,000 of USDS and the Sky Savings Rate is 3.75% (Q1 2026 close rate):

• You deposit it into the savings module and receive sUSDS at the current ratio (~9,140 sUSDS if 1 sUSDS was approximately 1.094 USDS in April 2026).
• You do nothing else. Over a year at 3.75%, your position grows to about $10,375 of USDS value.
• The growth shows up as a rising redemption ratio, not more sUSDS — each sUSDS is worth progressively more USDS (cleaner for accounting than a rebasing balance).
• Redeem anytime for USDS at the higher ratio; no lockup, no LPing, no impermanent loss.

That simplicity — a steady, governance-set dollar yield with instant exit — is why sUSDS anchors $6.49B in deposits and ranks as the largest rate-bearing stablecoin globally.

MakerDAO → Sky: the Endgame timeline

Sky is the latest stage of MakerDAO's multi-year "Endgame" plan to simplify products, rebrand the token, and decentralize into specialized "Stars." Last verified: 2026-05-31.

The throughline: MakerDAO matured from "crypto-collateralized DAI" into a diversified, RWA-backed dollar with a savings rate and a modular Star ecosystem. The 2026 exchange migrations mark the practical end of DAI's dominance — legacy DAI (~$4.4B) remains on-chain but exchange liquidity has shifted decisively to USDS.

USDS, sUSDS, and SKY

USDS is the dollar; sUSDS is the savings version that earns the rate; SKY is governance — stake it for rewards and to borrow USDS. DAI upgrades 1:1 to USDS and MKR upgrades to SKY at 1:24,000. Last verified: 2026-05-31.

• USDS — $11.7B supply (Q1 2026); hold for a stable dollar. Does not earn by itself. Contains a freeze function unlike DAI.
• sUSDS — deposit USDS to earn the Sky Savings Rate; 3.75% APY as of March 31, 2026; redemption ratio approximately 1.094 USDS per sUSDS (April 2026); $6.49B outstanding — the largest rate-bearing stablecoin globally.
• SKY — govern the protocol, stake for rewards, and borrow USDS against staked SKY. Converted from MKR at 1 MKR = 24,000 SKY. Price approximately $0.07 in early 2026 (~$1.9B market cap).
• DAI — legacy token, ~$4.4B remaining on-chain; upgradeable to USDS 1:1. Exchange liquidity has migrated to USDS.
• MKR — legacy governance token; upgradeable to SKY at 1:24,000.

The common mistake is holding plain USDS expecting yield — you must move into sUSDS to earn the savings rate.

Stars and the Endgame

Stars are semi-independent SubDAOs that build products on Sky's stablecoin and liquidity, each often with its own token; Spark (lending and liquidity) is the flagship with $5B+ TVL and the SPK token, and the structure is core to Sky's decentralizing "Endgame" plan. Last verified: 2026-05-31.

Rather than one monolithic DAO governing everything, Sky's Endgame splits specialized functions into Stars. Spark — a lending and liquidity Star — is the most prominent, running three modules:

• SparkLend — Aave-style lending markets for USDS, ETH, and other assets.
• Spark Savings — savings products tapping Sky's USDS liquidity.
• Spark Liquidity Layer (SLL) — deploys capital across DeFi and RWAs.

Spark's TVL exceeded $5B by 2026. The SPK token launched June 17, 2025: 10B tokens at genesis, with 35% to the Spark ecosystem and 65% to Sky for a 10-year farming campaign; approximately 24.2% of total SPK supply had unlocked by late May 2026, with the next unlock scheduled for June 17, 2026. SPK staking enables Spark governance and protocol security. Stars can issue their own tokens and run their own incentives — the aim is a more modular, resilient protocol where specialized teams innovate without bottlenecking the core.

USDS vs other dollars

USDS is decentralized and over-collateralized with a governance-set savings rate; USDC is centralized fiat-reserve; DAI is its predecessor; USDe is a synthetic hedged dollar. Each has a different backing and risk profile. Last verified: 2026-05-31.

Use USDS/sUSDS for a decentralized dollar with a steady, governance-set savings rate; USDC for the simplest reserve-backed dollar; USDe for higher (variable) yield with a different risk model (see our Ethena guide). Full field in best stablecoins.

How to earn the Sky Savings Rate

Get USDS, deposit it into the savings module for sUSDS, hold to earn the governance-set rate, and optionally stake SKY — redeeming sUSDS back to USDS anytime. Last verified: 2026-05-31.

1. Get USDS by swapping or upgrading DAI 1:1 at Sky.money.
2. Deposit into the savings module to receive sUSDS.
3. Hold sUSDS — the redemption value rises at the SSR automatically.
4. Stake SKY (optional) for governance rewards and USDS borrowing.
5. Redeem sUSDS to USDS at the higher ratio whenever you want.

For comparison with other dollar yields, see our best crypto savings accounts guide.

Risks and what to avoid

Sky is conservative for DeFi but leans on real-world-asset collateral (off-chain counterparties), USDC via the PSM (~38% of backing), a USDS freeze function not present in DAI, plus governance and smart-contract risk; the savings rate is governance-set and can change. Last verified: 2026-05-31.

• USDS freeze function. Unlike DAI, USDS includes a balance-freeze capability for compliance/legal reasons. This is a centralization trade-off absent in DAI — material for users who prioritize censorship resistance.
• RWA collateral risk. Approximately 22% of backing is real-world assets, introducing off-chain counterparty and legal risk that pure-crypto stablecoins avoid.
• USDC exposure. The PSM holds significant USDC (~38% of backing), so USDS partly inherits Circle's centralization and banking risk.
• Governance risk. The savings rate, collateral mix, and parameters are set by SKY governance — votes can change your yield and the protocol's risk profile.
• Smart-contract risk. Battle-tested since the MakerDAO days, but non-zero.
• Peg risk. Over-collateralization and the PSM defend the peg, but extreme collateral or USDC stress is always a tail risk.

Sky is among the more conservative DeFi protocols, but "conservative" here includes trusting off-chain RWA counterparties, Circle's USDC, and the freeze function on USDS — a different risk profile than immutable-code DAI.

Safety checklist

1. Move USDS into sUSDS to actually earn — holding plain USDS yields nothing.
2. Check the current SSR before sizing in — it's governance-set and changes. 12-month range: roughly 3.60–9.0%.
3. Understand the backing — ~38% USDC (PSM), ~25% crypto collateral, ~22% RWA, ~10% Spark.
4. Understand USDS's freeze function — if censorship resistance matters, DAI (still upgradeable 1:1) lacks this feature.
5. If minting USDS against collateral, watch your liquidation threshold like any borrow.
6. Don't over-park in any single stablecoin model — diversify dollar exposure.
7. Verify the URL is sky.money.

Glossary

• USDS — Sky's over-collateralized stablecoin (successor to DAI); includes a freeze function.
• sUSDS — savings version of USDS; redemption ratio rises at the SSR; $6.49B outstanding (Q1 2026).
• Sky Savings Rate (SSR) — governance-set yield paid to sUSDS holders; 3.75% APY at Q1 2026 close.
• PSM (Peg Stability Module) — 1:1 USDC to USDS swap that defends the peg; ~38% of USDS backing.
• Stability fee — interest borrowers pay on USDS minted against collateral.
• SKY — governance token (MKR successor at 1:24,000); stake for rewards / USDS borrowing.
• Star / SubDAO — semi-independent unit built on Sky (Spark is the flagship).
• SPK — Spark's governance token; launched June 2025; 10B genesis supply.
• Endgame — MakerDAO's multi-year plan that produced the Sky rebrand and Stars structure.
• Over-collateralization — backing each USDS with more than $1 of collateral.

Looking ahead

Sky's 2026 trajectory is the Endgame in motion: USDS and sUSDS scaling (sUSDS at $6.49B is already the largest rate-bearing stablecoin globally), the exchange DAI-to-USDS migrations pushing USDS toward the $12B mark, and Stars like Spark expanding the ecosystem. Sky's own full-year 2026 outlook projects $611.5M in gross protocol revenue and $157.8M in protocol surplus. Watch three signals: the SSR relative to Treasury yields (the rate compression from ~9% to 3.60% tracked the Fed funds rate down), how many Stars launch and gain traction beyond Spark, and whether the USDS freeze function draws regulatory attention or becomes a model for compliant DeFi. Those tell you whether Sky consolidates as DeFi's steady stablecoin anchor or repositions as a tokenized-Treasury / compliance-friendly wrapper.

For context, see our Spark guide, Ethena guide, best stablecoins, and best real-world assets (RWA) guides.