Sky’s Strategic Move: Transitioning from MKR to SKY
In a significant development within the decentralized finance (DeFi) landscape, Sky, formerly known as MakerDAO, has proposed a pivotal upgrade that could reshape its governance structure and enhance user engagement. The proposal, which was posted on Sky’s decentralized autonomous organization (DAO) forum on May 1, 2025, aims to replace the Maker (MKR) token with the Sky (SKY) token as the protocol’s governance token. This transition is part of Sky’s broader strategy to finalize its upgrade from MakerDAO, marking a critical phase in its evolution.
Key Aspects of the Proposal
The proposal outlines several key changes:
Governance Token Transition: The SKY token will replace the MKR token as the primary governance token. This change is expected to streamline governance processes and align them more closely with Sky’s current operational framework.
Staking and Rewards: Enabling staking for SKY holders is a central component of the proposal. This feature is anticipated to incentivize participation and enhance the protocol’s security and stability. Additionally, the proposal includes the introduction of USDS rewards for SKY holders, further encouraging user engagement.
Migration and Downgrading: If the DAO accepts the proposal, the transition is scheduled to occur between May 15 and May 19, 2025. Importantly, the proposal includes a clause that would disable the ability to downgrade from SKY back to MKR, solidifying the transition.
Community and Governance
The proposal is currently under community review, with feedback being gathered before it is put to an on-chain vote. This democratic process underscores Sky’s commitment to community involvement and transparency in decision-making.
Sky co-founder Rune Christensen has expressed support for the proposal, highlighting its potential to enhance the protocol’s functionality and user experience. The transition from MKR to SKY is seen as a strategic move to align the governance token with Sky’s current and future objectives.
Market Context
As of April 30, 2025, the close price of the SKY token stands at $0.0639721. The token has experienced significant volatility over the past year, with a 52-week high of $0.101433 on December 2, 2024, and a 52-week low of $0.0161464 on September 5, 2024. The proposed changes are expected to impact the token’s market dynamics, potentially influencing its price trajectory.
Conclusion
Sky’s proposal to transition from MKR to SKY as the governance token represents a strategic evolution in its operational framework. By enabling staking and introducing USDS rewards, Sky aims to enhance user engagement and strengthen its position in the DeFi ecosystem. As the community deliberates on the proposal, the outcome will be closely watched by stakeholders and market observers alike, given its potential implications for Sky’s future growth and stability.