Sky

Sky is the new name of MakerDAO, the oldest protocol for issuing a stablecoin against crypto collateral. A user locks collateral and mints a dollar token; if the collateral falls below a threshold, the position is liquidated. That mechanism originated here and became the template for dozens of protocols. USDS joined the earlier DAI as an updated version, and the MKR governance token converts into SKY at a fixed ratio.

Votes by SKY holders set the parameters that matter: which assets are accepted as collateral, at what margin, and what rates apply to debt and to savings. The savings rate is the main lever on demand — raising it pulls in deposits and raises the protocol's costs at once. Over time real-world debt instruments were added alongside crypto collateral, tying income to outside interest rates.

Governance here carries the loss too: if liquidations fail to cover debt, the shortfall is closed by minting more SKY and diluting holders.

A shortfall left by failed liquidations is covered by minting more of the governance token — the people who vote are the people diluted.