Sky 2025: Towards parallel growth and 0 core expenses end of year Finally, after so many years of work, we are so close to realizing the original vision of Maker: An autonomous financial system that is able to securely maintain a stablecoin, while also continuously growing and innovating, in accordance with stable established decentralized governance protocols and avoiding cumbersome top down, political governance. In this post I will provide a lot more specific information, however keep in mind that there is still going to be improvements and fine-tuning of the plan as it is implemented and the ecosystem learns from executing it in practice, but broadly the principles are stable and the final goal is clear. I am really excited to be able to share the details of the full plan to achieve 4 core objectives: 1: Increase revenue with autonomous processes Spin off innovative projects and explore new opportunities in different Star Agents, leveraging the Sky Agent Framework to let them tap into and accelerate the momentum and network effects of Sky and USDS, while also being free from restraints and have the autonomy to innovate and experiment. In order to grow the income Sky generates from USDS, as well as earn Ecosystem Upkeep fees from the Stars, which is paid like a service fee for the benefits the Sky Agent Framework provides to the Star. 2: Reduce Core Expenses to 0 in 2025 By spinning off all core projects into independent Star and Executor Agents, they will be housed in their own autonomous agents with their own tokens, clear, documented governance processes and their own profit and loss - removing all expenses from the Core. In the new model. Stars are able to generate profits from their products, and by tapping into Sky Agent Framework features such as the Accessibility Reward, which is like a referral fee on USDS, and Allocation System, which enables Stars to flexibly deploy USDS collateral into a multitude of external protocols, or incubate their own such as Spark Lend. Later in this post I will provide a complete list of all the Launch Stars that are currently being developed, and then map how each of the expenses in Launch Project and Atlas Budgets will be spun off into the various Stars. The framework also calls for Executor Agents who will oversee and facilitate Star Agent governance. These actors will receive funding through fees paid by Star Agents, but will require a level of funding to get started. The approach ensures that Core Expenses are reduced to 0 by the end of 2025, but without causing disruption to critical processes and all of the innovation that has been under way for years. 3: Minimize governance overhead, maximize autonomy By solidifying the Sky Agent Framework, which empowers Stars by providing all of the tools they need to expand and build on top of the Sky Protocol, all core governance decision making and proactive strategy decisions and complexity can be extremely simplified or abstracted away. This will reduce politics, struggle for resources, and the possibility of mismanagement or even corruption in the core governance bureaucracy. 4: Ensure long term risk management and maintenance through the Executor Agents and Aligned Delegates Sky introduces a competitive and self-sustaining governance model, where key infrastructure and maintenance expenses are directly tied to protocol net revenue. A maximum of 15% of protocol net revenue will be allocated for governance security and upkeep, with Aligned Delegates and Executor Agents competing to deliver these services at the highest quality and lowest cost. This natural competitive dynamic ensures that the few simple governance structures that remain will be continuously optimized to maintain efficiency, decentralization, and financial sustainability. The incentives promote that governance remains lean, market-driven, and fully aligned with the long-term success of the ecosystem. Choosing the Aligned Delegates and the Core Executors becomes the only ongoing responsibility of SKY holders participation in governance, vastly simplifying the complexity of being a SKY voter. Mapping projects and project expenses to Stars The (very rough estimate) for total spending in cash terms for the Core is 4 million USDS per month. Of these 4 million USDS per month, roughly 1 million USDS per month represents spending towards close-ended projects that are required for the full long term sustainability of the Sky Ecosystem, including foundational Atlas AI work, and protocol core development. The remaining roughly 3 million USDS per month represents spending on ongoing projects that are monetizable or required for continuous operation and maintenance of the Ecosystem. These projects can all be spun off into either Star Agents, or Executor Agents. Please note! The numbers are very rough ballpark figures, and much more detailed numbers will be released by the Launch Project soon, which will go through the historical spend in detail. The purpose of providing the numbers in this post is just to give readers an overview of what bringing Core Expenses to 0 in 2025 looks like. The list below details the currently incubating Launch Stars, including their strategic focus, and a rough overview of how they will take over existing spending, relationships and infrastructure, enabling the cost and complexity to be spun off the core. Some of the project and budgets will be shared among several Stars, meaning they share both the upside and the costs. A very rough relative amount is provided in parentheses following the line item. As an example: Risk and analytics budget (33%) denotes that roughly 33% of the costs related to Risk and analytics will be spun off to that particular Star. Many of the Stars described will be capitalized through external capital, to help give them a bigger buffer to build a moat and grow their product-market fit. Ultimately, all Stars will have to pay for long term expenses through their own earnings. There is also a current budget of roughly 40 million SKY (1666 MKR equivalent) per month going to contributors. All of these tokens expenses will be replaced by token grants in the new Star and Executor tokens instead, eliminating them from the Core Expenses as well. Spark Spark is a DeFi focused Star Agent that makes sUSDS easily accessible for DeFi users, and uses the Allocation System to back Spark Lend, a lending platform, and the Spark Liquidity Layer, which deploys USDS collateral into protocols like Aave and Ethena. Spins off the following budgets and capabilities: * Phoenix Labs (100%) * Risk and analytics budget (33%) Takes over the following core assets: * Spark Lend infrastructure Launch Star 1 (RWA) Launch Star 1 is an upcoming Star that is taking over the core RWA business of Sky, and will focus on allocating into Tokenized RWA products and make RWA tokens available to end users. Spins off the following budgets and capabilities: * RWA operations budget (100%) Takes over the following core assets: * RWA Infrastructure and allocations * LitePSM (in a phased manner to ensure USDS stability) Launch Star 2 (Solana) Launch Star 2 takes over all of the current efforts, infrastructure and relationships on Solana. It will focus on developing sUSDS and growing its adoption, alongside developing a Solana native extension of the Allocation System in order to deploy USDS capital into good opportunities in Solana DeFi, and also allocate into Ethereum Mainnet opportunities. Takes over the following core assets: * Solana related infrastructure and relationships Launch Star 3 (Adoption Frontend) Launch Star 3 will focus on DeFi App Frontends ensuring there is easy-to-use access to the Sky Ecosystem and key Sky products such as sUSDS, and governance capabilities. Spins off the following budgets and capabilities: * Frontend development budget (33%) * Risk and analytics budget (33%) * Security operations budget (50%) Launch Star 4 (Governance Tooling) Launch Star 4 focuses on pushing the limits of what can be done with advanced governance tooling, both improving access to governance for SKY holders, and incubating new Stars that organize humans and decentralized workforces in new and innovative ways. Spins off the following budgets and capabilities: * Atlas, DAO and Governance tooling budget (100%) * Frontend Development Budget (33%) Launch Executor 1 (Operational Executor) Launch Executor 1 will be the first Operational Executor, and will be responsible for operationalizing all of the processes and systems of the Stars. They will initially be subsidized by a closed ended allocation of capital, and once at least one more Operational Executor is live, they will begin charging the Stars for their services as the fair market value. Spins off the following budgets and capabilities: * DaoCraft (100%) * Spell Development Budget (50%) Launch Executor 2 (Core Executor) Launch Executor 2 will be the first Core Executor, and will be responsible for verifying that the Stars and the Operational Executor carries out their operations in accordance with the Atlas. Launch Executor 2 will be funded by up to 10% of the Sky Ecosystem Net Revenue (in the future state where there are 0 direct expenses in the core). It may use a reduced amount of the budget to build up its reputation, in order to retain the Core Executor Role long term, and will be required to invest a portion of its funding into improving the Atlas, including improving the First Loss Capital Requirements Framework. Spins off the following budgets and capabilities: * Atlas Axis (100%) * Atlas work Budget (100%) * Spell Development Budget (50%) * Security Operations Budget (50%) Getting all the way to 0 core expenses All of the projects and budgets described above represent 100% of ongoing operational spend and value in Sky Core, and can all be monetized directly, or paid for through the Executor System, making it a perfect fit for spinning off into Agents. By spinning the expenses off the core and putting them into specific Agents, the only costs that remain with the Core are the 1 million USDS per month of temporary investment costs, including the foundational Atlas AI systems, and core protocol development of features such as the new Activation Engine and the First Loss Capital token system, and USDS and Sky Ecosystem branding and marketing transition. These projects are not monetizable, but they will also be spun off before the end of 2025 by giving them a final, close-ended allocation of resources. More details of this to come soon. This will then leave the core with 0 expenses at the end of 2025, and vastly greater simplicity. The Sky Endgame With minimal complexity at the core, Sky will become a protocol that only focuses on regulating tail risk related to the Allocation System, which allows Stars like Spark to generate USDS from Sky and then allocate it into the wider ecosystem after credit enhancing it with First Loss Capital. By defining the proper Capital Ratio Requirements in the Atlas, Sky can ensure that Stars provide the necessary level of credit enhancement for all of their collateral allocation, ensuring that they adjusted for their individual risk. SKY holders will not have to vote directly on this system, instead it will be a responsibility handled by professional actors paid and managed by the Core Executors, who will compete to provide the best and most solid risk management, for the lowest possible cost, ideally by building automated, long term solutions tapping into AI and automation tools rather than ongoing, manual tasks that requires continued spending. Next Steps The Governance Operations working group has been developing the Atlas infrastructure and logic necessary to facilitate bringing Core Expenses to 0 by end of 2025. This includes the Sky Agent Framework implementation in the Atlas itself, as well as early stage Artifacts for the first 4 of the initial Launch Stars. The first public drafts of the Sky Agent Framework Atlas Documents and the Star Artifacts will be shared soon. After public review, they will then be prepared to be proposed into the Atlas, which will mark the beginning of the transition of resources and responsibility off Sky Core and into the Stars.