Use Sky (formerly MakerDAO): DAI to USDS, sUSDS and SKY

MakerDAO is now Sky. This guide covers what changed, how to upgrade DAI to USDS and MKR to SKY, the three realistic ways to get USDS, and where each interface actually lives.

What Sky is, and what changed from MakerDAO

MakerDAO — the protocol that launched DAI and has been issuing an overcollateralised stablecoin since 2017 — rebranded to Sky in August 2024 as the first visible step of its "Endgame" restructuring. The rebrand was not cosmetic. It introduced a parallel token set that now sits alongside the originals:

• USDS — the Sky stablecoin. An ERC-20 with upgradeable architecture that adds permit support and EIP-1271 smart-contract signature validation, so smart-contract wallets can authorise transfers with a signature rather than a separate approval transaction.
• sUSDS — savings USDS. A fully ERC-4626-compliant vault token that represents a deposit earning the Sky Savings Rate (SSR).
• SKY — the governance token that replaces MKR.
• stUSDS — a newer, deliberately riskier "Expert" token. Sky's own documentation describes it as a risk-capital token that funds borrowing liquidity for SKY stakers and is "structured to absorb a greater share of system risk in exchange for the potential to capture a larger portion of protocol rewards." It is not a savings account and should not be treated as one.
• DAI and MKR — the legacy pair. Both still exist and still work; neither has been forcibly retired.

Crucially, the phrase "mint USDS" now means several different things depending on which route you take, and only one of them involves opening a collateral vault. Read the next section before you connect a wallet, because picking the wrong route is the most expensive mistake on this page.

The three ways to get USDS

1. Upgrade DAI you already hold. Sky operates a DAI–USDS converter contract that, per the protocol docs, "converts DAI to USDS at a fixed ratio of 1:1 and vice versa" with "no fees assessed" — and the documentation further states that "fees cannot be enabled on this route in the future." It is bidirectional, so you can convert back to DAI at any time. For anyone who already holds DAI this is by far the cheapest and simplest route: you pay Ethereum gas and nothing else.

2. Buy or swap into it. USDS trades on DEXs and on the protocol's own Peg Stability Module (LitePSM), which lets USDC be exchanged for the protocol stablecoin at a fixed rate subject to governance-set fee parameters. Most users reach this indirectly through an aggregator or a DEX; you are paying swap costs and any PSM fee rather than taking on debt.

3. Borrow it against collateral. This is the actual "minting" path — you lock collateral, generate USDS as debt, and pay an ongoing stability fee until you repay. In the Sky app itself this is available through the Staking Engine, where SKY is the collateral. For other collateral types (ETH, LSTs, RWAs and so on) the borrowing has largely migrated to Sky-ecosystem front ends such as Spark, which runs SparkLend and Spark Savings on top of Sky liquidity. If you came here expecting the old Oasis-style ETH vault, that is the route you want.

Which interface to use

Phishing clones of Sky rank on ads and in search, so learn the real surface area rather than clicking links:

• Portal: sky.money — marketing and product explainers.
• App: app.sky.money — the actual widgets. The app is widget-driven and the URL reflects it, e.g. ?widget=upgrade for the DAI/MKR upgrade and ?widget=stake for the Staking Engine, with a network parameter for chain selection.
• Governance voting: vote.sky.money.
• Protocol data: info.sky.money, and chainlog.sky.money for the canonical registry of deployed contract addresses.
• Technical docs: the developer documentation now serves from the skyeco.com domain (requests to developers.sky.money 301-redirect there). Seeing a skyeco.com URL is not, by itself, a red flag — but verify it resolves from a link on the official portal rather than from a search result.

USDS is not Ethereum-only. Sky has native deployments beyond mainnet and operates SkyLink, its own bridging rail for moving USDS and sUSDS to supported L2s. Which chains are live changes; check the network selector in the app rather than trusting a list in any article, including this one.

What you'll need (prerequisites)

• A self-custodial Ethereum wallet — MetaMask, Rabby or a hardware wallet. Rabby is worth preferring here because it previews balance changes before you sign.
• ETH on the network you intend to use, for gas. Mainnet actions cost meaningfully more than L2 actions.
• The input asset: DAI if you are upgrading, USDC or another stablecoin if you are swapping, SKY if you intend to stake and borrow.
• Comfort with ERC-20 approvals, and a plan for revoking them afterwards.
• If you plan to borrow: a repayment plan and a tolerance for liquidation risk. Do not borrow with money you need next month.

Step-by-step

1. Step 1: Reach the app without clicking a search ad

   Navigate to the Sky portal by typing the domain, then follow its own link into the app. Bookmark the resulting app URL. Never reach a stablecoin protocol through a sponsored search result, a Discord link or a reply-guy on X — impersonation of Sky is constant, and the fake sites are pixel-accurate.

2. Step 2: Connect a self-custodial wallet

   Click the connect button and choose your wallet. Connecting produces a signature request, not a transfer — read it anyway. A legitimate connection signs a plain session or SIWE-style message. If the prompt instead asks you to sign a Permit, PermitSingle or increaseAllowance payload before you have chosen an action, reject it and close the tab.

3. Step 3: Confirm the network

   The Sky app selects a network explicitly and encodes it in the URL. Confirm the wallet and the app agree before you do anything else. USDS balances are chain-specific: USDS on an L2 is a different token account from USDS on mainnet, and sending one to an address that only exists on the other chain is unrecoverable.

4. Step 4: Choose the widget that matches your intent

   Upgrade converts DAI to USDS (or MKR to SKY). Savings deposits USDS to receive sUSDS and earn the Sky Savings Rate. Stake opens the Staking Engine for SKY. These are genuinely different products with different risk. Do not open the Staking Engine because you wanted a savings deposit.

5. Step 5: Approve the exact amount

   The first interaction with any of these contracts needs an ERC-20 approval. Set the allowance to the amount you are actually depositing rather than accepting an unlimited approval. It costs one extra transaction on future deposits and removes a standing claim on your balance if a contract or front end is ever compromised.

6. Step 6: Upgrade DAI to USDS (route 1)

   Enter the DAI amount and confirm. The converter is a fixed 1:1 swap with no protocol fee, so the only cost is gas and the only number to check is that the USDS output equals the DAI input. There is no slippage setting because there is no price to slip. The route works in reverse too, so this is a reversible, low-commitment action.

7. Step 7: Deposit to the Sky Savings Rate (optional)

   Supplying USDS to the savings module returns sUSDS, an ERC-4626 vault share. Sky's docs state plainly that there are "no fees assessed" and that "fees cannot be enabled on this route in the future"; there is no lockup and no withdrawal queue. Your sUSDS balance does not increase in token count — the share price rises, so a constant sUSDS balance redeems for more USDS over time. The SSR itself is an administered rate voted by SKY governance, not a market rate set by utilisation, which means it can be changed by a governance vote at any time. Read the current rate in the interface; do not trust a rate quoted in an article.

8. Step 8: Stake SKY and borrow USDS (optional, advanced)

   The Staking Engine (contract name: LockStake Engine) lets you deposit SKY into a vault position and then, per the docs, "borrow USDS using the deposited SKY as collateral," "stake the entire SKY deposit in the vault to earn rewards," and "delegate the voting power of the entire SKY deposit in the vault to a governance delegate." Internally the engine issues a non-transferable LSSKY balance that users "cannot directly handle or transfer," and the vault position itself cannot be transferred to another address. Borrowing here is a leveraged bet on a volatile governance token: if SKY falls, your position is liquidated. An exit fee applies when withdrawing staked SKY — read the figure the interface shows you before you commit, since it is a governance parameter.

9. Step 9: Upgrade MKR to SKY, if you still hold MKR

   The protocol conversion rate is fixed at 1 MKR to 24,000 SKY. Two things make this urgent rather than optional. First, the conversion is one-way: Sky's documentation states that "conversions are irreversible within the protocol; converting SKY back to MKR requires executing a swap on an external exchange." Second, governance activated a Delayed Upgrade Penalty on 18 September 2025, starting at 1% and, per the published timeline, increasing "by an additional 1%" every three months unless governance decides otherwise. The penalty reduces the SKY you receive per MKR, so the ratio shown in the app today will be lower than 24,000 by whatever the current penalty is. Check the quoted output in the widget — that is the authoritative number.

10. Step 10: Verify on-chain and keep the record

    Open the transaction on Etherscan (or the relevant L2 explorer) and confirm the token transfers match what the interface promised. Save the hash. Upgrades, savings deposits and redemptions all have tax implications in most jurisdictions, and reconstructing them a year later from an app UI is far harder than from a list of hashes.

Fees, and how each one is charged

Sky's fee structure is unusually legible compared with most DeFi, because several routes are contractually fee-free:

• DAI to USDS conversion: no fee, fixed 1:1, and the docs state fees cannot be enabled on this route in future. You pay gas only.
• USDS to sUSDS (savings): no deposit fee, no withdrawal fee, no lockup, with the same "fees cannot be enabled" guarantee in the documentation. Gas only.
• MKR to SKY: no explicit fee, but the Delayed Upgrade Penalty functions as one by shrinking the conversion ratio the longer you wait.
• Borrowing USDS: an ongoing stability fee accrues on the debt, plus an exit fee on withdrawing staked SKY from the Staking Engine, plus a liquidation penalty if the position is liquidated. All three are governance parameters that change; the interface displays the live values.
• Peg Stability Module swaps: governed by tin/tout parameters that governance can set to zero or above. Check the current figure rather than assuming it is free.
• Gas: the dominant cost for small users on mainnet. A conversion, an approval and a deposit are three separate transactions. If you are moving a few hundred dollars, mainnet gas can exceed a year of savings yield — use an L2 deployment or don't bother.

Security and pitfalls

• Domain confusion is now a real risk surface. The ecosystem legitimately spans sky.money and skyeco.com, and the docs domain redirects between them. Attackers exploit exactly this kind of multi-domain footprint. Verify every new domain from a link on a site you already trust.
• USDS is not DAI technically. Sky's docs describe USDS as an ERC-20 "built with upgradeable architecture" — meaning its implementation can be changed by governance — whereas the DAI contract cannot be upgraded. Some users deliberately stay in DAI for exactly that reason. Neither choice is wrong, but make it knowingly rather than by default.
• stUSDS is not a savings product. Its own documentation calls it a risk-capital token that absorbs a greater share of system risk. Advertised yields on stUSDS are compensation for taking first-loss exposure to SKY-collateralised borrowing. Treat it as you would a junior tranche, not as a stablecoin deposit.
• Yields are administered, not earned by you. The SSR is voted, funded out of protocol surplus generated by borrowers' stability fees. A governance vote can cut it overnight. Nothing about sUSDS is a fixed-rate instrument.
• Peg risk is real if the collateral backing is. Sky's reserves include real-world-asset exposure alongside crypto collateral. That diversification is the reason yields exist, and also the reason USDS is not risk-free.
• Unlimited approvals compound every other risk. Revoke what you no longer use; see our guide on revoking token approvals.
• Simulate before signing. Rabby and Tenderly will both show you the net balance change of a transaction. On a hardware wallet, read the address on the device screen, not the one on your monitor.

Troubleshooting

• The upgrade widget shows less than 24,000 SKY per MKR. That is the Delayed Upgrade Penalty, not a bug or a bad front end. It increases over time. There is no way to get the un-penalised ratio back.
• My sUSDS balance hasn't gone up. It won't. sUSDS is an ERC-4626 share token — the number of shares stays constant while the redemption value per share grows. Check the USDS value of the position, not the token count.
• Transaction reverted. On these contracts the usual causes are an allowance that is smaller than the amount, a debt ceiling or module cap that has filled, or insufficient ETH for gas. Paste the hash into Tenderly to read the actual revert reason rather than guessing.
• Stuck pending transaction. Replace it: resend with the same nonce and a higher gas price, or cancel with a 0-value self-transfer at the same nonce. Do not submit a second attempt at a new nonce, or you may execute the action twice.
• Wallet shows no USDS after a successful transaction. Add the token contract manually, and confirm you are looking at the right chain. The explorer receipt is the source of truth.
• Borrow position health dropped fast. SKY is volatile. Repay part of the debt or add collateral immediately; do not wait for a rebound. Liquidation penalties are charged on top of losing the collateral.
• Front end won't load or shows a stale balance. Try a different RPC endpoint in your wallet before assuming the protocol is broken. Public RPCs lag under load.

When not to use this route

Sky is not the right answer for everyone, and there are several situations where using it is straightforwardly a mistake:

• You just want a dollar-pegged token to trade with. USDC or USDT have deeper liquidity across more venues. USDS earns its place when you intend to use the savings rate or the Sky lending stack, not as a general-purpose trading unit.
• You're moving small amounts on Ethereum mainnet. Three transactions of mainnet gas to capture a few percent on a small balance is negative expected value. Use an L2 deployment or a centralised alternative.
• You need a guaranteed rate. The SSR is set by a vote and changes. If you need a fixed yield to a fixed date, a fixed-rate protocol or a tokenised T-bill product fits better.
• You want leverage on a blue chip. Borrowing against SKY in the Staking Engine is leverage on a governance token, which is a very different trade. If you want to borrow against ETH or BTC, use a lending market designed for it.
• You're in DAI and specifically value its immutability. Then stay in DAI. The upgrade is optional and reversible, but there is no obligation to take it.
• You cannot manage a liquidation. Any borrowing route requires you to monitor a position. If you won't check it, don't open it.

FAQ