Deep Dive
1. Governance Overhaul (September 2025)
Overview: MakerDAO rebranded to Sky Protocol, replacing MKR with SKY governance tokens (1 MKR = 24,000 SKY). This upgrade aims to streamline decentralized decision-making and introduce staking rewards.
Key changes include direct voting for SKY holders, simplified proposal processes, and enhanced security against governance attacks. The transition includes a penalty fee for delayed MKR→SKY conversions post-September 2025.
What this means: This is bullish for DAI because it reduces centralization risks and incentivizes long-term participation through staking. However, legacy MKR holders must actively migrate to retain governance rights.
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2. Stablecoin Migration (2024-2025)
Overview: DAI was upgraded to USDS, a rebranded stablecoin maintaining a 1:1 peg but offering new features like the Sky Savings Rate (variable yield) and compatibility with DeFi protocols.
The migration preserves DAI’s collateralization model while integrating multi-chain support (Ethereum, Solana, Polkadot). Users can convert DAI to USDS via a decentralized contract without liquidity restrictions.
What this means: This is neutral for DAI as USDS adoption grows, but legacy DAI remains functional. The upgrade enhances cross-chain utility but requires user action to access new yields.
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3. Exchange Integration (September 2025)
Overview: Major exchanges like Bitso and CoinJar automated the DAI→USDS and MKR→SKY migration, disabling legacy token trading and streamlining conversions.
The integration included halting MKR/DAI deposits and enabling post-migration withdrawals of USDS/SKY. Exchanges also introduced tutorials to guide users through wallet-based conversions.
What this means: This is bullish for DAI because it reduces friction for mainstream users, though reliance on third-party platforms introduces centralization tradeoffs.
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Conclusion
Dai’s codebase updates reflect a strategic shift toward decentralized governance (via SKY) and enhanced stablecoin utility (via USDS). While the transition requires user engagement, it strengthens Dai’s position in DeFi’s evolving landscape. How will broader adoption of USDS impact Dai’s dominance in multi-chain stablecoin markets?