Why does MakerDAO suddenly want to change its name when the old OG is doing well?

Author: Deep Tide TechFlow

Let me introduce you to a new project called Sky.

When this word appears, aside from the unfamiliarity, do you feel that such an ordinary and common name should correspond to a ground dog project that can reach the sky (Sky) tomorrow?

It's hard to imagine that this is a rebranding effort by MakerDAO, the pioneer of DeFi and the crypto stablecoin DAI.

On August 27, MakerDAO announced its plan to rebrand as Sky and upgrade its own tokens and stablecoins to the new names SKY and Sky Dollar (USDS).

The change from MakerDAO to Sky is not just a change of name, but also a change in brand perception.

For sufficiently substantial applications, removing a word from users' minds is a very difficult task. For example, you might still be accustomed to calling a certain social media app Twitter instead of X, and referring to tweets and CTs instead of "posts on X."

The position of MakerDAO in the crypto ecosystem may be comparable to that of Twitter in social media.

So, knowing that it is not easy, what changes does the new Sky bring, and why the rebranding?

What Changes in Business and Assets?

What users care about most is whether the assets will be affected after MakerDAO is renamed to Sky.

According to Sky's latest official tweet, the existing MKR and DAI tokens will be upgraded to the new SKY and USDS (Sky Dollar) tokens. This upgrade process follows these rules:

1. Exchange from MKR to SKY:

Each 1 MKR can be exchanged for 24,000 SKY tokens. This ratio is fixed, meaning that MKR holders will receive the corresponding amount of the new governance token SKY after conversion.

2. Exchange from DAI to USDS:

The exchange rate between DAI and USDS will remain 1:1. This means that each 1 DAI held by users can be directly exchanged for 1 USDS, ensuring the continuity of the stablecoin's value.

It is worth noting that this token upgrade is voluntary. Users can choose whether to convert their MKR and DAI into the new tokens. This gives community members more options.

For users holding MKR, their governance rights will remain intact after converting to SKY. Sky promises that the new governance model will be more efficient and transparent.

At the same time, Sky has provided a user-friendly migration tool to help users easily complete the conversion process from old tokens to new tokens.

However, according to the official website, it seems that only about 370 users have completed this migration so far, indicating that there is still some resistance in community education and promotion.

To encourage more users to migrate to the new SKY tokens, the team announced an additional reward mechanism, offering 1.25 times the SKY and USDS token rewards for users who complete the token migration during the beta period.

Why the Rebranding?

For most people, MakerDAO's rebranding seems a bit abrupt, and some negative voices have emerged in the community.

For instance, although the name has changed to Sky, the old Twitter account @MakerDAO does not seem to have been deactivated or properly handled, and an unknown small account called MakerDAO has been registered by others and is playing with memes.

In the comment section of Sky's rebranding announcement, aside from simple congratulatory messages, opposing voices are also quite common.

Well-known KOL @stacy_muur raised the soul-searching questions:

"What was wrong with the MakerDAO brand? Why are you all so keen on rebranding? Why are you harming the mature brand perception?"

So, what is the reason behind Sky's rebranding? Perhaps we can find clues in a blog post by MakerDAO co-founder Rune Christensen from May titled “Reconciling the Two Opposing Paths for Decentralized Stablecoins”.

In this article, Christensen elaborated on the key challenges MakerDAO faces and its future development direction, laying the groundwork for this rebranding:

1. Addressing Regulatory Pressure

Christensen mentioned that decentralized stablecoins are facing unprecedented regulatory pressure. Particularly in the United States, regulatory agencies are becoming increasingly strict regarding cryptocurrencies, especially stablecoins. In this environment, MakerDAO needs to reposition itself to adapt to the changing regulatory landscape. Rebranding as Sky may be a way to distance itself from its past identity and create greater flexibility for future development.

2. Technological Upgrades and Reconstruction

The article actually pointed out that MakerDAO needs significant technological upgrades. This includes improving smart contracts, optimizing governance mechanisms, and enhancing the system's scalability.

Thus, the logic is that rebranding as Sky is not just a change of brand but also represents a comprehensive overhaul of the underlying technical architecture. For crypto projects, such a thorough change often requires a completely new brand image to reflect it, such as Fantom's Sonic.

3. Mass Adoption Requires New Brand Perception

To make stablecoins more widely known and adopted, compliance with regulations is a prerequisite, but simplifying brand perception is equally important. The name "MakerDAO" may seem obscure and difficult to understand for those outside the cryptocurrency circle. In contrast, "Sky" is simple and memorable, helping to attract a broader user base, especially those who are not very familiar with cryptocurrencies.

A Trend of Brand Upgrades in Crypto?

In fact, MakerDAO is not the only one undergoing a brand upgrade.

In the past year or two, rebranding in crypto projects has gradually become a new fashionable phenomenon.

When old coins become boring and speculators want something new, changing the brand name, creating new token symbols, and starting anew with a new price curve always sounds more exciting.

For example, Fantom became Sonic, several AI projects merged into ASI, Galaxy was renamed Galxe and then changed to Gravit… Brand renaming is common in the crypto market.

Data source: @cornergirl999, compiled by Deep Tide TechFlow

According to a recent statistical analysis of crypto token upgrades and merger cases, brand renaming, token migration, or mergers do not guarantee immediate and/or long-term positive price trends.

Therefore, projects must ensure that there are sufficient reasons and solid foundations to support "why migrate or merge." This way, they can gain logical and business legitimacy, providing a correct rationale for token speculation.

MakerDAO's transformation into Sky clearly follows the trend of brand renaming in the crypto fashion phenomenon.

However, whether its tokens and business development will see a qualitative improvement, and whether everything will change while remaining the same, still requires time to provide an answer.