What is SKY (Formerly Maker, MKR)?

Understanding the Origin: What Was Maker (MKR)?

Before diving into Sky, it is important to first understand the origins of Maker (MKR). Maker was one of the pioneering decentralized finance (DeFi) projects built on the Ethereum blockchain. It was primarily known for its role in the MakerDAO protocol, a decentralized autonomous organization (DAO) that allowed users to create and manage DAI—a decentralized stablecoin pegged to the U.S. dollar.

The Role of Maker (MKR) in the Ecosystem

MKR tokens were essential to the functioning of MakerDAO. Holders of MKR had the responsibility of governing the system, voting on critical changes such as the stability fee (interest rate) and collateral types for generating DAI. More importantly, MKR was burned (destroyed) whenever a loan was repaid, thereby reducing the supply of MKR over time.

MKR holders also faced the risk of dilution in cases where the system became undercollateralized. This role of governance and risk absorption set the project apart, as MKR holders had a vested interest in maintaining the health of the system.

MakerDAO's rebrand to Sky

On September 18, 2023, MakerDAO rebranded to Sky and announced the names of its newly upgraded tokens: USDS and SKY. This rebranding marks a significant shift from its original focus on collateralized lending and stablecoin generation to a more expansive vision. Recognizing the evolving demands of the decentralized finance (DeFi) space, Sky aims to address these challenges by offering a broader range of financial applications, tools, and governance mechanisms. This transformation is designed to create a more robust, scalable, and inclusive ecosystem, extending its impact beyond the DeFi community to various sectors within the blockchain landscape.

The Technology Behind Sky

Sky is built on a foundation of Ethereum, but with an eye toward multi-chain interoperability. This means that while Ethereum remains the primary blockchain for the protocol, Sky is working to integrate with other chains such as Polkadot, Solana, and Avalanche. This cross-chain focus is aimed at improving scalability, reducing transaction fees, and increasing accessibility for users across different blockchain ecosystems.

Smart Contracts and Security

Like MakerDAO, Sky relies heavily on smart contracts to automate processes such as collateral management, voting, and asset trading. The Sky protocol uses a combination of audited and upgradable smart contracts to ensure both security and adaptability in the rapidly changing world of DeFi.

Security remains a top priority for the Sky ecosystem. The protocol has implemented several layers of security, including:

• Audits by Third-Party Firms: Regular audits are conducted by top blockchain security firms to identify potential vulnerabilities in the code.

• Insurance Pools: Sky has introduced decentralized insurance pools to provide users with additional protection in case of unforeseen exploits or system failures.

Sky Token: The Lifeblood of the Ecosystem

Much like MKR was essential to MakerDAO, the SKY token serves as the lifeblood of the new ecosystem. It is used for governance, staking, and as collateral within various applications on the platform.

1. Staking SKYTokens

SKY introduces a more dynamic staking model compared to MKR. Users can stake their tokens not just for governance purposes but also to earn rewards in the form of other cryptocurrencies or stablecoins. This creates additional incentives for long-term holders and helps stabilize the platform by reducing the circulating supply of Sky tokens.

2. SKY’s Deflationary Model

SKY retains the deflationary token model that was a hallmark of MKR. Every time a transaction or protocol fee is paid, a portion of SKY tokens are burned, reducing the total supply over time. This deflationary model is designed to create long-term value for token holders by increasing scarcity.

How Does Sky Differ from MakerDAO?

At its core, Sky builds on the same principles that made MakerDAO successful but expands beyond its original scope. Some of the key differences include:

• Multi-Chain Focus: While MakerDAO was primarily Ethereum-based, Sky has a multi-chain vision, integrating with several blockchain networks.

• Broader Financial Products: Sky offers a wider range of financial instruments, including synthetic assets, yield farming, and staking protocols.

• Layered Governance: Sky introduces a more sophisticated governance model that allows users to participate in different levels of governance based on their token holdings and expertise.

How to buy MKR on Hata (Hata currently only supports MKR)

1. Create an Account: Sign up on the Hata platform by providing your email address and setting up a secure password. Verify your email to activate your account.

2. Verify Your Identity: Complete the KYC (Know Your Customer) process by submitting the necessary identification documents as required by Hata for security purposes.

3. Deposit Funds: Add funds to your Hata account.

4. Navigate to MKR: Once your account is funded, go to the cryptocurrency marketplace on Market Instant Buy and search for MKR.

5. Place an Order: Decide on the amount of MKR you wish to purchase.

6. Secure Your MKR: After purchasing, ensure your MKRis stored securely. You can keep it in your Hata wallet.

7. Monitor Your Investment: Keep track of your MKRinvestment through the Hata platform. Stay updated on market trends and news to make informed decisions.

Conclusion

Sky (SKY), formerly known as Maker (MKR), represents a bold new direction in the world of decentralized finance. By expanding its focus beyond collateralized lending and stablecoin generation, Sky aims to create a more inclusive, scalable, and innovative ecosystem that serves a wider audience. Whether through its enhanced governance model, multi-chain capabilities, or new financial products, Sky is poised to make a significant impact on the future of blockchain technology. As the world of DeFi continues to evolve, Sky will undoubtedly remain at the forefront of this financial revolution.

DISCLAIMER & WARNING

The information provided here is presented "as is'' and is intended for general informational and educational purposes only. It does not come with any representation or warranty of any kind. This content should not be interpreted as financial, legal, or other professional advice, and it is not intended to endorse or recommend the purchase of any specific product or service. It is advisable to consult with appropriate professional advisors for personalised guidance. In cases where the article is contributed by a third-party author, please note that the expressed views belong to the author alone and may not necessarily reflect the opinions of Hata. For further details, we encourage you to read our complete disclaimer. Please be aware that the prices of digital assets can be highly volatile. The value of your investment may increase or decrease, and there is a risk that you may not recover the full amount invested. You are solely responsible for making your own investment decisions, and Hata cannot be held liable for any losses you may incur. This material is not to be construed as financial, legal, or other professional advice. For more information, please refer to Hata’s Terms of Use and Risk Warning.