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What Is Sky Dollar?

Sky Dollar (ticker USDS) is a decentralized, over-collateralized stablecoin soft-pegged to the US dollar. It is issued by Sky, the protocol that ran for years under the name MakerDAO, and it launched on September 18, 2024 as part of the rebrand. USDS is not a new financial system: it is minted by the same battle-tested vault machinery that has kept DAI near a dollar since 2017. Users lock collateral into Sky vaults and mint dollars against it, and the protocol earns revenue from stability fees and from yield on its reserves.

The relationship between USDS and DAI is the single most confusing thing about this token, so it is worth stating plainly. USDS is the upgraded successor to DAI, but DAI was not shut down and still has roughly 4.9 billion dollars in circulation. The two are interchangeable through the official DAI-USDS converter at a fixed 1:1 rate in both directions, with no fee, and Sky's documentation states that fees cannot be enabled on that route in the future. In practice this means DAI and USDS are two front doors into the same collateral system. Exchanges and DeFi protocols have steadily shifted liquidity toward USDS, but nobody is forced to convert.

Governance moved in parallel. The old MKR governance token is being replaced by SKY at a fixed rate of 24,000 SKY per MKR. Since September 2025 a Delayed Upgrade Penalty has applied, shaving a percentage point off the conversion and growing by another point every three months, and most major exchanges have delisted MKR and converted customer balances. So the mapping is simple: MKR became SKY, and DAI gained a successor in USDS. SKY holders vote on the parameters that govern USDS, including collateral types, debt ceilings, and the savings rate.

Backing is a mix of crypto collateral and real-world assets. On the crypto side, USDS is minted against ETH, liquid staking tokens, and other approved assets in over-collateralized vaults, and against USDC and similar stablecoins through peg stability modules that allow 1:1 swaps. On the real-world side, Sky is one of the largest DeFi holders of tokenized US Treasuries and short-term credit, which is where much of the protocol's revenue now comes from. Sky's own dashboard reports collateral worth meaningfully more than the outstanding USDS supply, which is the point of an over-collateralized design. In August 2025, S&P Global Ratings assigned Sky Protocol a B- issuer credit rating with a stable outlook, its first-ever credit rating for a DeFi protocol; S&P separately publishes a stablecoin stability assessment covering USDS and DAI.

USDS is also a yield product, which is a big part of why people hold it. Depositing USDS into the Sky Savings Rate returns sUSDS, an ERC-4626 token whose value accrues automatically against USDS. There is no lockup and no fee to enter or exit through the official app. The rate is set by SKY governance rather than by borrowing demand, and it moves: it peaked above 8 percent in early 2025 and sits closer to 3.6 percent as of mid-2026, with roughly 4.75 billion dollars of sUSDS outstanding. In early 2026 Sky added stUSDS, a higher-risk "Expert" token that funds SKY-backed borrowing and is explicitly structured to absorb a greater share of system risk in exchange for a larger share of protocol rewards. It is not a savings account and should not be confused with sUSDS.

Sizing USDS honestly requires acknowledging that the trackers disagree. DefiLlama counts roughly 6.7 billion dollars of circulating USDS, while CoinGecko and Sky's own site put the figure near 10 billion, a gap that comes down to how protocol-held, converter-held, and cross-chain supply is netted out. What is not in dispute is the rank: USDS is the third-largest stablecoin, behind Tether and USDC and well ahead of everything else. Supply hit an all-time high above 11 billion dollars in April 2026 and has drifted lower since, tracking a general contraction in stablecoin supply through the middle of the year. USDS is native to Ethereum and is distributed to Base, Arbitrum, Optimism, Unichain, Avalanche, and Solana through Sky's SkyLink bridging system, though the overwhelming majority of supply sits on Ethereum mainnet.

The organizational structure behind USDS is the "Endgame" plan that Rune Christensen spent years pushing through governance. The SubDAOs and "Stars" of the original Endgame documents now operate as the Sky Agent Network: semi-independent units that take allocations of USDS liquidity and deploy them into different strategies. Spark, the largest, is a lending and savings platform that launched its own SPK token in June 2025. Grove focuses on institutional tokenized credit, and newer agents such as Obex and Keel run additional yield strategies. This is where the yield paid to sUSDS holders is generated, and it is also where the risk sits.

Which brings up the main criticism of USDS. Unlike DAI, whose core contract is immutable, USDS is deployed behind an upgradeable proxy, and Sky governance retains the ability to add a freeze capability that could halt transfers from specific wallets. The plan surfaced with the rebrand in August 2024 and drew immediate criticism from DeFi purists, who saw a censorship tool bolted onto a stablecoin whose entire pitch was decentralization. Christensen's response was that a protocol holding billions of dollars of real-world assets has to come to terms with governments and legal systems, that DAI would stay immutable and unfreezable for users who want that, and that a fully immutable "PureDai" remains on the roadmap. The freeze capability was not switched on at launch, but the ability to add it exists, and the Solana deployment of USDS does carry a freeze authority. Beyond that, USDS inherits the ordinary risks of its backing: smart contract bugs, exposure to centralized stablecoins such as USDC through the peg stability modules, and counterparty risk on tokenized real-world assets.

Getting Started With Sky Dollar

USDS behaves like any other ERC-20 stablecoin, with the added option of earning the protocol's savings rate:

  1. Step 1: Set up an Ethereum wallet such as MetaMask or Rabby. USDS is native to Ethereum, and versions exist on Base, Arbitrum, Optimism, Unichain, Avalanche, and Solana.
  2. Step 2: Acquire USDS on an exchange, swap for it on a DEX, convert DAI 1:1 through the official Sky app, or mint it against collateral in a Sky vault.
  3. Step 3: Optionally deposit USDS into the Sky Savings Rate through app.sky.money to receive sUSDS, which accrues yield automatically and can be redeemed for USDS at any time.
  4. Step 4: Use USDS across DeFi as collateral, in lending markets such as Spark, or in stablecoin liquidity pools. Check the current savings rate before committing, because governance changes it regularly.

How to Get a Sky Dollar Wallet?

Any wallet that handles ERC-20 tokens can hold USDS. The choice mostly comes down to which chain you plan to use.

MetaMask

MetaMask is the most widely used option for USDS on Ethereum and connects directly to the Sky app for converting DAI, minting from vaults, and depositing into the Sky Savings Rate.

Rabby

Rabby is a browser-extension wallet built for DeFi users. It simulates transactions before signing, which is useful when interacting with savings, staking, and vault contracts.

Phantom

Phantom supports the Solana deployment of USDS, where transfers are fast and cheap. Note that Solana holds only a small fraction of total USDS supply, so liquidity there is thin compared with Ethereum.

Hardware Wallets

A Ledger or Trezor device paired with MetaMask or Rabby keeps private keys offline. This is the sensible setup for larger USDS or sUSDS balances held over the long term.

Sky Dollar Resources

How to Buy Sky Dollar?

USDS trades on both centralized and decentralized venues, and it can also be created directly from the protocol rather than bought on the open market.

Centralized Exchanges

USDS is listed on Binance, Coinbase, Kraken, OKX, Bybit, Bitget, Gate, and Upbit, generally against USDT or a local currency. Volumes on centralized venues are modest for a stablecoin of this size, because most USDS activity happens on-chain.

Decentralized Exchanges

The deepest USDS liquidity is on Ethereum, where Uniswap handles the large majority of volume, with some additional depth on Maverick. On Solana, USDS trades on Raydium and Orca. Holders of DAI do not need a DEX at all: the official Sky app converts DAI to USDS 1:1 with no fee, and back again.

Latest Sky Dollar News

USDS supply reached an all-time high above 11 billion dollars in April 2026 and has contracted since, falling alongside a broader decline in total stablecoin supply through the first half of the year. That April peak was not organic growth so much as a flight to safety. On April 18, 2026, an attacker exploited a KelpDAO bridge and minted unbacked rsETH, in what became the largest DeFi exploit of the year. Sky came out of it well: it paused the USDS Solana bridge as a precaution and confirmed that USDS itself was unaffected and fully collateralized, and SparkLend, the largest of the Sky Agents, had already frozen rsETH months earlier, so it took no bad debt at all and absorbed a large inflow of deposits from users leaving other lending markets. It was the first real stress test of the Agent Network's risk model, and the model held. The Sky Savings Rate has come down with the supply, from a peak above 8 percent in early 2025 to roughly 3.6 percent as of mid-2026, as yields on the tokenized Treasuries and credit backing the protocol have compressed. Sky has responded by pushing distribution, including a March 2026 partnership with the wallet infrastructure provider Privy that lets consumer apps route savings balances into sUSDS programmatically.

The other notable development is stUSDS, launched in early 2026 as Sky's first "Expert" token. It sits below sUSDS in the risk stack, funding SKY-backed borrowing in exchange for a higher rate, and a leveraged stUSDS market has since gone live on Morpho. Sky's leadership has also been open about wanting to raise the protocol's B- credit rating from S&P Global to attract institutional capital, which is shaping how the Sky Agent Network allocates collateral. Because the savings rate, supply, and agent allocations all change with governance votes, the official Sky app, dashboard, and governance forum are the places to check current figures.