Original | Odaily Planet Daily ( @OdailyChina )
Author | Dingdang ( @XiaMiPP )
MakerDAO, one of the early founders of the decentralized finance (DeFi) field, has recently quietly launched a profound reform of its token economic model. From changing its brand name to Sky Protocol to gradually replacing the governance token MKR with SKY. Unfortunately, this carefully rehearsed transformation drama did not even make a splash in the market .
As early as 2022, founder Rune Christensen proposed the Endgame Plan, which aims to cope with increasingly complex governance challenges and fierce market competition by integrating real-world assets (RWA), optimizing economic mechanisms and rebranding. However, the implementation of this plan has not been smooth sailing. Some investors have doubts about the strategic direction and have gradually reduced their holdings of MKR; the community has also divided opinions due to governance differences, making this change low-key and even not fully noticed by the market.
This transformation is not only an innovation of MakerDAOs existing model, but also a reshaping of its future positioning.
The launch of Sky Protocol marks Makers transformation from a single stablecoin protocol to a diversified DeFi ecosystem, and the deep cooperation with traditional finance behind it further highlights the ambition of this strategy. Runes vision is to build Maker into a bridge between the on-chain and off-chain, and to enhance the stability and market appeal of the protocol by introducing RWA and optimizing the token economy.
However, the market does not seem to have fully realized the far-reaching significance of this change: the reduction of holdings by investors and the controversy in the community have obscured the new pattern that Sky is building. This article will analyze in detail the adjustment process and significance of the MKR economic model, and explore the deep signals released by its cooperation with Wall Street capital.
MakerDAO’s Rebranding and Token Conversion
MakerDAO’s brand upgrade to Sky Protocol is accompanied by a gradual transition of the governance token from MKR to SKY.
Through the sky.money platform, users can voluntarily convert at a fixed ratio of 1 MKR to 24,000 SKY. As of March 25, 2025, the total supply of MKR has been reduced to approximately 874,000 (due to historical destruction and other factors), of which 11.8% has been converted to SKY. This ratio is lower than expected, reflecting the wait-and-see attitude of some holders towards the new ecosystem.
At the same time, the stablecoin DAI provides a 1:1 upgrade path to USDS. Users can obtain SKY rewards by staking USDS. This design significantly enhances the functionality of USDS. According to the latest data, the total locked value (TVL) of the Sky ecosystem is about 480 million US dollars, and the circulation of USDS is estimated to be 1.5 billion US dollars, showing the markets initial acceptance of its stablecoin system. However, the total supply of Dai is still as high as 8.3 billion US dollars, which means that 82% of Dai has not completed the upgrade. This potential circulation provides broad space for the growth of USDS.
It should be pointed out that upgrading to the Sky ecosystem is not mandatory. Dai and MKR users can choose to keep the original mode, but only by holding USDS and SKY can they unlock the full functionality of the Sky protocol, such as participating in governance, obtaining rewards, or using new modules. This voluntary conversion design not only retains Makers flexibility, but also leaves a buffer period for the promotion of Sky. For example, users holding Dai will not be able to enjoy the staking benefits of USDS if they do not upgrade, and MKR holders may miss out on the governance rights of the new ecosystem if they do not convert to SKY.
The significance of this transformation is that Sky has not only unified the governance system and injected new vitality into USDS through token conversion and brand reshaping, but also provided solid support for subsequent economic model optimization and RWA strategy. Although the conversion progress has not yet been fully covered, the 11.8% conversion rate shows that there are still a large number of MKR holders who are on the sidelines, but the prototype of Skys ecology has taken shape. In the future, with the increase in USDS circulation and the launch of more functions, this ratio is expected to increase further.
SKY Smart Burn Engine
Sky has introduced a “Smart Burn Engine” mechanism that aims to optimize its economic model by reducing the circulating supply of SKY tokens.
According to Sky Runes post on the X platform, the mechanism has been launched recently, using about 1 million USDS per day to purchase SKY tokens and destroy them. Temporarily estimated at this rate (may change later), the annual destruction amount is about 365 million US dollars. Combined with the current market price of MKR (about 1270 US dollars) and the exchange ratio of 1: 24,000, the unit price of SKY is about 0.053 US dollars. Based on this calculation, the number of SKY destroyed each year is about 689 million. If the initial total supply of SKY is set at 24 billion (for the convenience of calculation, it is assumed that 1 million MKR are fully converted), the annual destruction accounts for about 2.87% of the total. Although this ratio is not radical, it will significantly affect the supply structure over time.
The source of funds is the key support for this mechanism. Skys destruction funds mainly rely on the surplus of the protocol, among which the interest income of tokenized US bonds plays a key role. According to makerburn.com data, the total surplus of the Treasury controlled by DAO is currently $139 million, mainly from Dais loan interest and early RWA income. However, the annual destruction demand of $365 million far exceeds the current surplus, indicating that Sky may rely on future RWA investment income or other sources of income to supplement funds.
This mechanism creates space for value growth for long-term holders by reducing the circulation of SKY and gradually increasing its scarcity. Compared with the slow destruction of MKR in the Maker era (1%-2% per year on average), the scale and automation of the smart destruction engine are more radical, demonstrating Skys innovation in token economic design. At the same time, the destruction action relies on RWA income, highlighting Makers first-mover advantage in the field of real assets. From a broader perspective , this strategy strengthens Skys competitive position in the DeFi stablecoin market, especially in the context of USDS gradually replacing Dai in circulation, its deflationary model may attract more investors who focus on long-term returns.
MKR/SKY Staking and Seal Engine
Sky’s Seal Engine mechanism provides users with a new way to participate: lock MKR or SKY tokens in exchange for staking rewards (Seal Rewards), which are usually issued in the form of USDS or Sky Star tokens (such as SPK).
So far, the total locked value (TVL) of this mechanism has reached 210 million US dollars, showing a certain appeal. Unlike traditional staking, Seal Engine retains a certain flexibility: although the locked tokens cannot be withdrawn directly, users can obtain additional funds by lending USDS. The current borrowing rate is 20%, which is dynamically adjusted by on-chain governance. This design reduces the liquidity cost of locked positions, making more users willing to participate. However, an exit fee is required when unlocking, which is initially 5% and increases to a maximum of 15% over time.
The staking mechanism provides holders with a stable source of income. Using USDS as a reward medium not only enhances its liquidity and practicality in the DeFi ecosystem, but also improves the overall stickiness of the ecosystem through binding with SKY.
Strategic significance: Skys diversified positioning and industry leadership
Skys token economic model has evolved from a single destruction mechanism in the MKR era to a multi-dimensional system that emphasizes both destruction and staking. The Smart Destruction Engine drives the value growth of SKY by gradually reducing its supply, while the Seal Engine strengthens the ecological stickiness through locking tokens and reward mechanisms. The stability of USDS and the income attributes of sUSDS further enrich this system.
The introduction of RWA is the core pillar of this model. Compared with traditional DeFi protocols that rely on the volatility of on-chain assets, Sky achieves a more reliable cash flow through the income of real assets, which not only provides protection for economic activities within the ecosystem, but also lays the foundation for its risk resistance during market downturns.
In addition, compared with protocols such as Aave and Compound, Sky is unique in that it connects on-chain and off-chain assets through RWA, breaking through the limitation of DeFis reliance on crypto-native assets. Aave focuses on providing liquidity and borrowing services, Compound is deeply involved in the decentralized lending market, and Sky has opened up a new path of institutionalization and decentralization by tokenizing assets such as US bonds. This positioning not only allows it to maintain its leading position in the field of stablecoins, but also seizes the initiative in the track of real asset integration, setting a new benchmark for the industry.
Signs of cooperation with Waldorf
It is worth noting that Sky’s transformation is accompanied by in-depth cooperation with traditional financial giants. The tokenized U.S. debt products of BlackRock-Securitize, Superstate and Centrifuge are about to receive up to $1 billion in investment plan funding from Sky (formerly MakerDAO).
Specifically, the final allocation of the plan will be market-driven, with a cap of $1 billion. If allocated according to the cap, BUIDL issued by BlackRock-Securitize is expected to receive $500 million, Superstates USTB will receive $300 million, and Centrifuges JTRSY will receive $200 million. After approval by community governance, these assets will become collateral for Skys native stablecoin USDS and its yield-corresponding currency sUSDS. This cooperation not only provides more solid asset support for Skys economic model, but also releases important market signals in the context of Wall Street investors reducing their holdings of MKR.
In the past few years, some Wall Street investors (such as a16z) have doubts about Makers strategic direction and gradually reduced their holdings of MKR, which once frustrated market confidence. However, cooperation with top institutions such as BlackRock may reverse this narrative. BlackRock, as the worlds largest asset management company, manages more than 10 trillion US dollars in assets. Its tokenized product BUIDL was selected by Sky, indicating that Skys technology and compliance have reached the standards recognized by institutions. This choice not only injects high-liquidity, low-risk real assets into the stability of USDS and sUSDS, but also marks that Sky may regain trust in the traditional financial field.
This signal is particularly critical in the current context. The investment scale of US$1 billion not only verifies Skys strategic value of connecting DeFi and traditional finance (TradFi), but may also change the wait-and-see attitude of investors. Backed by BlackRocks industry influence, Sky may attract more attention from traditional capital, thereby reversing the previous decline caused by the reduction of holdings. More importantly, this cooperation directly supports Runes long-term vision: through the deep integration of RWA, Sky can not only maintain its leading position in the DeFi field, but also occupy a place in the institutionalization wave of TradFi. This trend has injected new impetus into Skys future development, indicating that the potential of its economic model will be gradually realized in a wider financial ecosystem.
