Original | Odaily Planet Daily (@OdailyChina)
MakerDAO, as one of the early pioneers in the decentralized finance (DeFi) space, has recently quietly initiated a profound reform of its token economic model. From rebranding to Sky Protocol, to the gradual replacement of the governance token MKR with SKY. Unfortunately, this meticulously rehearsed transformation has barely made a splash in the market.
As early as 2022, founder Rune Christensen proposed the "Endgame Plan," aimed at addressing increasingly complex governance challenges and fierce market competition through the integration of real-world assets (RWA), optimization of economic mechanisms, and brand reshaping. However, the implementation of this plan has not been smooth. Some investors have expressed doubts about the strategic direction and have gradually reduced their holdings of MKR; internal community divisions over governance have also led to differing opinions, making this transformation appear low-key and even insufficiently noticed by the market.
This transformation is not only an innovation of MakerDAO's existing model but also a reshaping of its future positioning.
The launch of Sky Protocol marks Maker's transition from a single stablecoin protocol to a diversified DeFi ecosystem, and its deep collaboration with traditional finance further highlights the ambition behind this strategy. Rune's vision is to establish Maker as a bridge connecting on-chain and off-chain, enhancing the protocol's stability and market appeal through the introduction of RWA and optimization of the token economy.
However, the market seems yet to fully realize the far-reaching significance of this change: the reduction in holdings by investors and community disputes have overshadowed the new landscape that Sky is building. This article will analyze in detail the adjustment process of the MKR economic model and its significance, and explore the deep signals released by its collaboration with Wall Street capital.
MakerDAO's Brand Reshaping 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 1 MKR to 24,000 SKY at a fixed ratio. 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 a wait-and-see attitude among some holders towards the new ecosystem.
At the same time, the stablecoin DAI provides a 1:1 upgrade path to USDS, allowing users to earn SKY rewards by staking USDS, significantly enhancing the functionality of USDS. According to the latest data, the total value locked (TVL) in the Sky ecosystem is approximately $480 million, while the estimated circulation of USDS is $1.5 billion, indicating the market's initial acceptance of its stablecoin system. However, the total supply of Dai remains as high as $8.3 billion, meaning that 82% of Dai has not completed the upgrade, providing ample room for the potential circulation of USDS to grow.
It is worth noting that upgrading to the Sky ecosystem is not mandatory; Dai and MKR users can choose to retain the original model, but only holders of USDS and SKY can unlock the full functionality of the Sky protocol, such as participating in governance, earning rewards, or using new modules. This voluntary conversion design retains Maker's flexibility while allowing a buffer period for the promotion of Sky. For example, users holding Dai who do not upgrade will miss out on the staking rewards of USDS, while MKR holders who do not convert to SKY may miss governance rights in the new ecosystem.
The significance of this transition lies in that Sky, through token conversion and brand reshaping, not only unifies the governance system and injects new vitality into USDS but also provides solid support for subsequent economic model optimization and RWA strategy. Although the conversion progress has not yet fully covered, the 11.8% conversion rate indicates that a large number of MKR holders are still in a wait-and-see mode, but the embryonic form of Sky's ecosystem is already taking shape. In the future, as the circulation of USDS grows and more functions are launched, this ratio is expected to further increase.
SKY Smart Burn Engine
Sky has introduced the "Smart Burn Engine" mechanism, aimed at optimizing its economic model by reducing the circulating supply of SKY tokens.
According to Sky co-founder Rune's post on the X platform, this mechanism has recently been launched, utilizing approximately 1 million USDS daily to purchase SKY tokens and destroy them. Temporarily estimating at this rate (which may change later), the annual destruction amount is about $365 million. Combining the current market price of MKR (approximately $1,270) and the 1:24,000 exchange ratio, the unit price of SKY is about $0.053. Based on this calculation, the annual number of SKY tokens destroyed is approximately 689 million. If the initial total supply of SKY is set at 24 billion (assuming all 1 million MKR are converted for ease of calculation), the annual destruction amount accounts for about 2.87% of the total supply. While this ratio is not aggressive, it will significantly impact the supply structure over time.
The source of funds is a key support for this mechanism, with Sky's destruction funds primarily relying on protocol surplus, where the interest income from tokenized US bonds plays a crucial role. According to makerburn.com, the total surplus controlled by the DAO is currently $139 million, mainly derived from Dai's borrowing 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 to supplement funding.
This mechanism gradually increases the scarcity of SKY by reducing its circulating supply, creating value growth space for long-term holders. Compared to the slow destruction of MKR during the Maker era (1%-2% annually), the scale and automation of the Smart Burn Engine are more aggressive, showcasing Sky's innovation in token economic design. At the same time, the destruction actions rely on RWA income, highlighting Maker's first-mover advantage in the field of real assets. From a broader perspective, this strategy strengthens Sky's competitive position in the DeFi stablecoin market, especially against the backdrop of USDS gradually replacing Dai in circulation, its deflationary model may attract more investors focused on long-term returns.
MKR/SKY Staking and Seal Engine
Sky's Seal Engine mechanism provides users with a new way to participate: locking MKR or SKY tokens in exchange for staking rewards (Seal Rewards), which are typically distributed in the form of USDS or Sky Star tokens (such as SPK).
As of now, the total locked value (TVL) of this mechanism has reached $210 million, showing a certain level of attractiveness. Unlike traditional staking, the Seal Engine retains some flexibility: while locked tokens cannot be directly withdrawn, users can borrow USDS to obtain additional funds, with the current borrowing rate set at 20%, dynamically adjusted by on-chain governance. This design reduces the liquidity cost of locking, making more users willing to participate. However, a withdrawal fee must be paid upon unlocking, initially set at 5% and increasing to a maximum of 15% over time.
The staking mechanism provides holders with a stable source of income, using USDS as the reward medium, which not only enhances its liquidity and utility within the DeFi ecosystem but also increases the overall stickiness of the ecosystem through its connection with SKY.
Strategic Significance: Sky's Diversified Positioning and Industry Leadership
Sky's token economic model has evolved from the single destruction mechanism of the MKR era to a multi-dimensional system that emphasizes both destruction and staking. The Smart Burn Engine promotes value growth by gradually reducing SKY supply, while the Seal Engine strengthens ecosystem stickiness through token locking and reward mechanisms. The stability of USDS and the yield attributes of sUSDS further enrich this system.
The introduction of RWA is the core pillar of this model. Compared to traditional DeFi protocols that rely on the volatility of on-chain assets, Sky achieves more reliable cash flow through the income from real assets, which not only provides security for economic activities within the ecosystem but also lays a foundation for its risk resistance during market downturns.
Additionally, compared to protocols like Aave and Compound, Sky's uniqueness lies in connecting on-chain and off-chain assets through RWA, breaking through the limitations of DeFi's reliance on crypto-native assets. Aave focuses on providing liquidity and borrowing services, while Compound delves into the decentralized lending market, and Sky opens a new path of coexistence between institutionalization and decentralization through tokenized US bonds and other assets. This positioning not only keeps it at the forefront of the stablecoin sector but also allows it to seize opportunities in the integration of real assets, setting a new benchmark for the industry.
Signals of Collaboration with Wall Street
It is noteworthy that Sky's transformation is accompanied by deep collaboration with traditional financial giants. The tokenized US bond products from BlackRock-Securitize, Superstate, and Centrifuge are set to receive up to $1 billion in investment plan allocations from Sky (formerly MakerDAO).
Specifically, the final allocation of this plan will be market-driven, with a cap of $1 billion. If allocated to the cap, BlackRock-Securitize's BUIDL is expected to receive $500 million, Superstate's USTB $300 million, and Centrifuge's JTRSY $200 million. After community governance approval, these assets will become collateral for Sky's native stablecoin USDS and its yield corresponding currency sUSDS. This collaboration not only provides a more solid asset backing for Sky's economic model but also releases important market signals against the backdrop of Wall Street investors reducing their holdings of MKR.
In the past few years, some Wall Street investors (such as a16z) have expressed doubts about Maker's strategic direction, gradually reducing their holdings of MKR, which led to a temporary setback in market confidence. However, collaboration with top institutions like BlackRock may reverse this narrative. BlackRock, as the world's largest asset management company, managing over $10 trillion in assets, has had its tokenized product BUIDL selected by Sky, indicating that Sky's technology and compliance have reached standards recognized by institutions. This choice not only injects high liquidity and low-risk real assets into the stability of USDS and sUSDS but also signifies that Sky may regain trust in the traditional financial sector.
This signal is particularly crucial in the current context. The $1 billion investment scale not only validates Sky's strategic value in connecting DeFi with traditional finance (TradFi) but may also change investors' wait-and-see attitude. With BlackRock's industry influence as a backing, Sky is likely to attract more attention from traditional capital, thereby reversing the downturn caused by previous reductions. More importantly, this collaboration directly supports Rune's long-term vision: through the deep integration of RWA, Sky can not only maintain a leading position in the DeFi space but also secure a place in the institutional wave of TradFi. This trend injects new momentum into Sky's future development, indicating that the potential of its economic model will gradually be realized within a broader financial ecosystem.
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