Sky Protocol, formerly MakerDAO, is a self-described “Multi-Collateral Dai (MCD)” lending protocol designed “to bring stability to the cryptocurrency economy.” To achieve this, MakerDAO employed a two-token strategy with MKR as its governance token and DAI as its stablecoin. MakerDAO’s rebrand to Sky Protocol introduces two additional tokens - SKY and USDS.

Project Function

Collateralized Borrowing: Sky allows users to mint USDS by opening vaults – a user can deposit collateral assets and borrow USDS against them from the protocol. Managing these USDS vault positions (creating, monitoring, or closing loans) is done through the same interface.

Savings (Earn Interest): Users looking for safe yield can deposit into the Sky Savings Rate (SSR) module via Sky.money. Users supply USDS to SSR and begin earning interest automatically.

Rewards and Staking: The interface also lets you participate in the Sky Token Rewards (STR) program by depositing USDS to earn SKY rewards, and it provides tools to stake SKY tokens in the staking/activation modules. Users can monitor their reward rates and claim accumulated SKY through the dashboard.

Cross-Chain Bridging: When using SkyLink, the Sky.money UI guides users through bridging assets to other chains. For example, if a user wants to move USDS from Ethereum to an L2, Sky.money will connect to SkyLink and handle the transfer process in a user-friendly way.

Token Utility 

USDS is the protocol’s collateral-backed stablecoin soft-pegged to the US Dollar (USD). Minting USDS via Sky Protocol entails over-collateralizing a loan with assets approved by Sky Protocol via the protocol’s governance mechanism and borrowing USDS.

About The Founders

Rune Christensen is the co-founder of Sky Protocol (formerly MakerDAO). Before entering the blockchain space, Christensen co-founded Try China, a startup focused on recruiting educators to work in China, which he later sold as he pivoted into crypto around 2014uphold.com. In 2015 he launched MakerDAO with the goal of creating a decentralized stablecoin system (issuing the Dai stablecoin) and served as CEO of the Maker Foundation to guide the project’s growth.

Risks of USDS

Like an investment in other crypto assets, there are some general risks to investing in USDS. These include:  (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to the Risks Specific to Holding Digital Assets statement.

In addition to these general risks, an investment in USDS is subject to the following specific risks:

USDS operates using smart contracts, which have an association with vulnerabilities and security breaches. Despite undergoing successful audits by well-regarded third-party entities, it is essential to acknowledge the existence of inherent risks. 

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with USDS. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.

The USDS community and Sky Protocol founding team are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of USDS have no recourse to the USDS community, Sky Protocol founding team, or Uphold if USDS declines in value for any reason.

Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.

Uphold’s Evaluation Process

Prior to listing USDS on the Uphold Platform, Uphold performed due diligence on USDS and determined that USDS is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following: 

The creation, governance, usage, and design of USDS, including ensuring the source code is open-source, audited and peer reviewed, security, and roadmap for growth in the developer community. 

The supply, demand, maturity, utility, and liquidity of USDS.

Any marketing materials put forward by the USDS social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.

Material technical risks associated with USDS, including any code defects, security breaches and other threats concerning USDS and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.

Legal and regulatory risks associated with USDS, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of USDS.