The brief

Analyst view

• DAI pioneered vault-backed stablecoins in 2017. Sky rebranded from MakerDAO in 2024.
• USDS is convertible 1:1 with DAI and earns approximately 3.6% APY via sUSDS staking as of October 2026.
• Combined USDS/DAI supply: $10.13B as of October 2026. Third-largest stablecoin after Tether and Circle.

Technical approach

As reported

Collateral

Vault-backed stablecoins

Users lock cryptocurrency (ETH, stETH, WBTC) in smart contracts to mint DAI or USDS. Liquidation auctions ensure the system is always overcollateralized.

PSM

Peg Stability Module

A mechanism to keep USDS and DAI at $1.00 by allowing users to swap stablecoins and USDC directly through the protocol at minimal spread.

Savings Rate

Sky Savings Rate (sUSDS)

USDS holders lock it as sUSDS to earn APY from protocol revenue, approximately 3.6% in October 2026.

Governance

SKY token

SKY token governs risk parameters, collateral types, and the Endgame roadmap. It replaced MKR in August 2024.

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