Sky Protocol’s stablecoin pivot gains traction as USDS supply booms

Since Sept. 17, 2024, the supply of USDS, the native stablecoin of the Sky Protocol (formerly known as Maker), has grown from 98.5 million to 2.32 billion at the time of writing, representing a 135% increase in five months.

In contrast, the supply of DAI, the stablecoin previously managed by MakerDAO, has decreased from 5.29 billion to 3.62 billion, representing a 31.5% decrease in the same period. This underscores the protocol’s transition from DAI to USDS, which has quickly gained traction as Sky's flagship USD-backed stablecoin.

For context, in August 2024, the Maker ecosystem underwent a major rebrand to become Sky Protocol.

A key element of this rebrand was the launch of USDS as Sky’s flagship USD-backed stablecoin with more robust collateral options and refined peg-management strategies. By adopting the name Sky, the protocol signaled a renewed focus on accessibility and growth.

The old Maker brand was closely associated with “early DeFi” and specialized circles. The shift allowed Sky to broaden its audience and pitch its stablecoin solution to newer participants and traditional financial players.

Part of the rebrand also included overhauling some of the protocol’s smart contracts and governance processes. The emphasis has been on easier community participation via improved voting tools, more predictable issuance, and, as previously mentioned, enhanced mechanisms to keep USDS’s peg stable across varying market conditions.

The pivot to USDS seems to have resonated with both existing MakerDAO users and newcomers to Sky, as evidenced by the recent increase in the USDS supply and decrease in DAI.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.