Sky (formerly MakerDAO)

Thesis

MakerDAO (rebranding as Sky) is among the most fundamentally sound DeFi protocols by revenue metrics. The protocol generates $150-200M in annualized revenue from DAI stability fees (interest on collateralized debt positions) plus yield from the Dai Savings Rate spread and Real World Asset (RWA) investments. MKR buyback-and-burn uses protocol surplus (after buffer) to purchase and burn MKR from the open market, at current revenue levels, this represents 5-8% annual buy pressure on the MKR supply. Sky's 'Endgame' restructuring (multi-year initiative) involves launching SubDAOs (specialized DAOs for RWA, DeFi, gaming) with their own governance tokens, while SKY token gradually replaces MKR (1 MKR = 24,000 SKY). Each SubDAO generates its own revenue stream with a portion flowing back to the main protocol. The first SubDAOs (Spark, a lending protocol managing $3B+ in assets) are live and generating significant revenue. Spark's USDS/DAI stablecoin operations integrate deeply with the broader DeFi system. RWA integration is MakerDAO's most significant growth driver: $1B+ in US Treasury bills, money market funds, and structured credit products are held by the protocol through regulated entities, generating 4-5% yield that subsidizes DAI's competitive Savings Rate. This creates a product that institutional capital understands, a DeFi protocol earning real-world yield and distributing it to stablecoin holders. During the 2024-2025 rate environment, MakerDAO's RWA book generated $100M+ in annual yield. Risk: The SKY migration is complex and creates uncertainty about MKR's long-term role. RWA integration creates regulatory exposure, if the SEC or other regulators target tokenized Treasury products, MakerDAO could face compliance challenges. DAI's $5B+ supply faces competition from USDC, USDT, and emerging regulated stablecoins (PYUSD, RLUSD). The Endgame plan's SubDAO complexity may dilute governance effectiveness.

Catalysts

• +MKR-to-SKY migration completion with SubDAO token launches driving new liquidity mining incentives
• +RWA portfolio expanding to $3B+ with higher-yield structured credit products boosting protocol revenue
• +Spark protocol TVL crossing $5B establishing Sky as leading DeFi bank, comparable to Aave/Compound

Risks

• -SKY migration complexity, unclear MKR vs. SKY value accrual split dampening investor conviction
• -RWA regulatory risk, tokenized Treasury exposure could face SEC enforcement as 'unregistered securities'
• -DAI supply competition from USDC and regulatory-compliant stablecoins fragmenting CDP market share

Common questions