MKR → SKY, DAI → USDS: The Next Generation of Tokens

For years, MakerDAO and its stablecoin DAI have been a core part of decentralised finance. They showed that a cryptocurrency could stay relatively stable, remain decentralised, and be governed by its community.

The trade-off was complexity. The system was powerful, but difficult for everyday users to understand or use.

To address this, the organisation has launched a major overhaul and rebranded to Sky Protocol. As part of this shift, there are two upgraded tokens: SKY (replacing MKR) and USDS (replacing DAI).

Here is what you need to know, if you hold MKR or DAI.

From Maker to Sky: Why the Change?

The main goal of Sky Protocol is to make DeFi simpler and more approachable. MakerDAO worked well for advanced users, but the learning curve was steep and the interface felt technical.

Sky Protocol is aiming to fix that. It is built to be easier to use, with clearer products that look and feel more like traditional savings tools, while keeping decentralised governance in place.

This is more than a new brand. It is part of a long-term "endgame" plan to scale the protocol. With the new tokens, Sky can support more features, such as the Sky Savings Rate and Sky Stars (independent projects that plug into the ecosystem). These features were hard to deliver within the old MakerDAO structure.

The New Tokens Explained

1. SKY (formerly MKR)

SKY is the new governance token for Sky Protocol. Just like MKR, it lets holders vote on how the protocol changes over time.

What is different is how it is structured and used.

• The split: The migration uses a 1:24,000 ratio. For every 1 MKR you swap, you receive 24,000 SKY.
• Utility: SKY is used for governance, and it can also be staked to earn rewards and accumulate USDS through the new protocol features.

The split does not change the total value of your position by itself. It simply increases the number of units you hold, similar to a stock split.

2. USDS (formerly DAI)

USDS is the upgraded version of the DAI stablecoin. It is designed to stay pegged at 1:1 with the US dollar.

• Interchangeable: USDS and DAI share the same underlying issuance model. You can swap DAI for USDS (on the SKY protocol), or USDS for DAI, at a 1:1 rate at any time, without liquidity limits, as long as you use the official tools or supported platforms.
• Legacy status: DAI is not being shut down. It remains active as a decentralised, censorship-resistant stablecoin. However, USDS is the token that will plug into new reward and savings features inside the Sky ecosystem.

Think of DAI as the original version, and USDS as the upgraded version that connects to more yield and savings tools.

How It Works in Practice

It can help to think about this change as an upgrade to your bank account, not just a token swap.

• The old way (Maker / DAI): You hold a $100 bill in your wallet, represented by 100 DAI. It keeps its dollar value, but it just sits there. To earn yield, you have to manually move it into complex DeFi contracts or third-party platforms.
• The new way (Sky / USDS): You swap your old $100 bill for a new digital note, USDS. It still behaves like digital cash for payments and transfers. On top of that, you can access a built-in "savings account" style feature, the Sky Savings Rate, by holding and staking USDS within supported apps.

If you decide not to upgrade, your DAI will still function as a dollar-pegged asset. You will simply miss the newer, easier interest-earning options that Sky is building around USDS.

How to migrate MKR

Since MKR trading has ended on many exchanges, you must use an external wallet and the official Sky interface to convert MKR to SKY.

Follow these steps:

1. Withdraw your MKR from an exchange to a self-custody wallet that supports Ethereum and custom tokens.

2. Connect your wallet to the official Sky Protocol website at sky.money by following the prompts on the site.

3. Swap your MKR for SKY using the protocol’s migration tool at the official conversion rate of:

   1 MKR = 24,000 SKY

Review the transaction details in your wallet before you confirm.

*Note: The Sky Protocol has flagged that a penalty fee for late MKR to SKY conversions started September 22, 2025. Check their website for details of the penalty structure.

Risks and security

Even though Sky Protocol is built on the long-running MakerDAO codebase, it is still DeFi. That means there are risks you should understand before you move funds.

• Phishing scams: Large token migrations are a common target for scammers. Fake "migration" or "airdrop" sites often appear and try to trick you into connecting your wallet. Do not click on ads or random links that promise easy swaps or bonus tokens. Type sky.money directly into your browser or use trusted links from official Sky or CoinJar channels.
• Smart contract risk: New features, such as the USDS savings or staking tools, use new or updated smart contracts. Even if they are audited, there is always a small chance of bugs or unexpected behaviour. Only put in funds you can afford to risk.
• Jurisdictional restrictions: Some Sky features, especially those involving yields or reward programs, may not be available in certain countries or US states because of local rules. Before converting or staking, check whether you are allowed to use those features in your location.

Always confirm contract addresses, bookmark official sites, and avoid rushing when you sign transactions.

The future of Sky

The move from Maker to Sky signals a shift toward more user-friendly crypto products. By focusing on smoother interfaces and backing its stablecoin with Real-World Assets, Sky is betting that digital dollars and on-chain savings can appeal to a much wider group of people.

You can keep using DAI if you value its long track record and pure decentralisation. Or you can obtain SKY or USDS on the Sky protocol to access the new savings and governance tools.

Either way, this ecosystem is likely to remain a major player in decentralised money for the foreseeable future.