Key Takeaways:
- Sky proposes phasing out the Maker (MKR) token in favor of the SKY token between May 15–19, with no option to revert back.
- Delayed MKR-to-SKY conversions will face increasing penalties starting September 18 to encourage timely migration.
- SKY staking will activate shortly after the upgrade, offering USDS-based rewards and contributing to a zero fixed-cost model by end of 2025.
Decentralized finance platform Sky has proposed phasing out the Maker (MKR) token in favor of its successor, SKY, as part of its final protocol upgrade.
The proposal, posted on Sky’s DAO forum on May 1, aims to fully transfer governance to SKY, with the transition expected between May 15 and 19.
A new governance proposal has been submitted to finalize the upgrade from MKR to SKY.
— Sky (@SkyEcosystem) April 30, 2025
It would enable SKY Staking, activating USDS rewards for SKY holders. If approved, this could be one of the final steps toward a transition to zero fixed costs by the end of 2025 directing… pic.twitter.com/aq9zm24b4H
Post-transition, reverting from SKY to MKR will be disabled.
Co-founder Rune Christensen endorsed the move, noting it would eliminate exchange adoption hurdles and streamline liquidity.
To encourage timely conversions, a 1% penalty will be introduced for late MKR-to-SKY swaps starting September 18, with the rate increasing quarterly.
Late users will also receive fewer SKY tokens.
Another key feature is the activation of SKY staking, offering rewards in USDS, a stablecoin tied to Sky Protocol’s income, with a 50% reward split beginning two to three weeks post-upgrade.
Liquidations involving SKY will be temporarily paused to prevent price manipulation during the transition.
Once liquidity stabilizes, normal risk parameters will resume.
The upgrade is seen as critical for achieving Sky’s goal of 0 fixed costs by the end of 2025.
Sky, formerly known as Maker, rebranded in 2024, and the community has since largely supported the new identity.
About The Author
Efe Bravo, a seasoned journalist, delivers compelling insights into the cryptocurrency and blockchain industry.
His articles offer a deep dive into the latest trends, projects, and technological advancements shaping the future of digital finance.
Check Efe out on:
