The renaming of MakerDAO to Sky: Is scale more important than decentralization?
This is not just a simple renaming, but a significant change in strategic direction.Author: flowie, ChainCatcher
Editor: Marco, ChainCatcher
Yesterday, the Maker protocol announced a brand upgrade to Sky, and the Maker ecosystem is undergoing a major overhaul.
The decentralized stablecoin Dai (DAI) will be upgraded to USDS at a 1:1 ratio, while the native governance token MKR will be upgraded to SKY at a ratio of 1:24,000. Maker SubDAO will be renamed to Sky Stars.
This is not just a simple rebranding, but a significant change in strategic direction.
Rune Christensen, co-founder of Sky (formerly Maker), stated that this brand transformation is an important step towards leading "the next evolution of DeFi," aiming to increase protocol accessibility and focus more on building usability, which will help attract more mainstream users from centralized exchanges.
However, after the upgrade, Spark Protocol CEO Sam MacPherson mentioned that USDS introduces a freezing feature. The Sky official website has also added a function to prohibit VPN logins.
Many crypto users have questioned Sky's departure from its decentralization goals.
PleasrDAO's @Lumbergdoteth posted on X: "DAI is currently migrating to USDS, a censorable stablecoin that goes against its original vision. RIP DAI, 2017-2024."
DefiLlama's @Oxngmi also tweeted: "Rip, it seems the Maker rebranding has introduced a VPN blocker (makerdao.com won't block)."
Previously in May, Rune Christensen also mentioned that after the DAI upgrade, they would consider introducing a freezing feature, but it would need to be decided through governance.
In response, Rune Christensen clarified that there will be no freezing feature at the time of the new protocol release, only an upgrade feature, "therefore, governance can later decide how to implement a similar freezing feature based on all data considerations and find ways to mitigate risk factors as much as possible."
Is the Scale More Important than Decentralization in the Migration from DAI to USDS?
In 2017, Sky (formerly Maker) stated in the official documentation for the launch of Dai that its mission is to become a censorship-resistant, fully decentralized stablecoin.
However, the upgraded USDS, confirmed by Phoenix Labs and Spark Protocol CEO Sam MacPherson on X, will have a freezing feature. Subsequently, possibly due to public pressure, Sam MacPherson deleted the related post. Rune Christensen also clarified that it needs to be decided through governance.
Currently, centralized stablecoins like USDT and USDC have freezing features. If a freezing feature is introduced, crypto KOL @sdcrypto123 stated that this means USDS will resemble a more centralized stablecoin similar to USDT and USDC, losing its censorship-resistant capability.
Sky's attempt to align its stablecoin with regulatory demands has actually been anticipated.
In May, Sky founder Rune Christensen announced on X that there would be a major upgrade to the DAI stablecoin, and in the future, its ecosystem would feature two types of stablecoins: one that complies with regulatory requirements and pursues scale, and one that is purely focused on the concept of decentralization.
To ensure that the former can expand smoothly to a global scale, a proposal for a "transfer freeze feature" will be released to comply with regulatory requirements from various governments.
The original Dai stablecoin will remain as it is, as its ERC-20 implementation has no backdoor contracts, making it impossible to modify and add a freezing feature. The newly announced upgraded stablecoin USDS should be the former.
The plan for a purely decentralized stablecoin, PureDai, will be launched later than USDS. Rune stated that PureDai aims to enhance the decentralization of the liquidation mechanism and minimize legal compliance risks to meet the ideals of censorship resistance and decentralization.
Rune explained the rationale behind this approach, stating that ultimately, it is all about scale.
According to Defilama data, although Dai is the third-largest stablecoin following USDT and USDC, the market share gap is significant, with USDT and USDC accounting for about 90% of the market.
Rune stated that from the moment Dai began to scale, it crossed two worlds—the crypto world, which values decentralization, and the real world, which presents new opportunities in traditional finance.
However, these two worlds are essentially at odds; for a stablecoin to achieve a peg to the dollar while maintaining pure decentralization, achieving large-scale adoption is impossible.
To resolve this, Rune mentioned two paths:
Pegging to the dollar and integrating with real-world assets. To prioritize utility and scale, choosing to peg to the dollar and integrating with real-world assets can quickly enhance the ecosystem's scale. This requires integration with traditional finance and compliance with regulatory demands.
Adopting a purely decentralized approach, which requires a completely independent architecture and design from centralized control, along with a liquidation mechanism that strictly relies on decentralized collateral.
Therefore, Dai needs to consider a transitional dual stablecoin solution. Rune described this as a gradual and thoughtful process that will take several years.
If Dai Compromises, Do We Still Need Decentralized Stablecoins?
While Dai may retain its status as a purely decentralized stablecoin, according to Rune's statements, most future use cases for Dai will be replaced by USDS.
The regulatory-compliant USDS may only reflect decentralization in terms of on-chain fund transparency and community governance in the future.
Sky's scale dilemma under regulatory pressure may be a common predicament for decentralized stablecoin protocols.
Crypto KOL Chen Mo (@cmdefi) stated that during the mid to late stages of DeFi Summer, the demand for decentralized stablecoins peaked. "However, as market cycles evolve, decentralized stablecoins face scalability limitations; they can circulate well on-chain but are almost impossible for centralized exchanges/institutions to accept, especially after the LUNA/UST collapse. As centralized exchanges gradually regain market attention, DeFi enters a stable period, and the demand for decentralized stablecoins is declining."
Crypto KOL @sdcrypto123 believes that in the face of strong centralized competitors like USDT and USDC, Sky's more centralized approach seems justifiable.
"Operating in a fully decentralized manner has not increased issuance over the years, hindering the value growth of the project token MKR (now SKY), so it is reasonable for the project team to make bold new attempts to enhance value."
Sky may be expanding its boundaries. @sdcrypto123 believes that the future MakerDAO will no longer be a simple stablecoin project or just an RWA project; it will evolve into a DeFi ecosystem centered around USDS, with many sub-projects emerging within the ecosystem, including cross-chain bridges, lending, POS staking derivatives, SWAP, and more.
From a competitive perspective, in the contest with USDT and USDC, which has the advantage—Dai, with its decentralized censorship resistance, or USDS, which complies with regulations? Currently, it is difficult to draw a conclusion.
Chen Mo believes that although the demand for decentralized stablecoins is declining in the short term, in the long run, decentralized stablecoins remain one of the largest markets in DeFi, "because once you have been affected by centralized censorship/freezing events, you will constantly remind yourself to avoid it as much as possible; in the long run, this will always be a net growth."
After the launch of USDS, how significant a position will Sky's purely decentralized stablecoin plan, PureDai, occupy in its ecosystem? Will it be able to solidify its market for decentralized stablecoins?
