Question 1

What is SKY?

Accepted Answer

SKY is Sky Protocol's Ethereum ERC-20 governance token. Following the governance upgrade, the new Chief governance contract uses SKY for on-chain voting and protocol-parameter governance, replacing the role previously performed by MKR. It is a protocol governance tool, not a stablecoin, and holding it does not represent corporate equity or a direct redemption claim on protocol collateral. Its core significance is that SKY can produce corresponding governance voting power only after being locked or delegated for use with the new Chief.

Question 2

What is the relationship between Sky Protocol and SKY?

Accepted Answer

Sky Protocol is a protocol system running on Ethereum smart contracts, whose governance determines certain protocol parameters. SKY's role is not to directly replace every type of asset in the protocol, but to carry voting power in the upgraded governance architecture. This distinction is important: governance tokens are used to influence governance decisions; stablecoins, collateral, and savings tokens each have their own minting, conversion, or yield logic. SKY should not be treated as a fixed redemption receipt for protocol assets merely because it is associated with the same protocol.

Question 3

How is SKY used for governance?

Accepted Answer

SKY's core use is to participate in on-chain voting and protocol-parameter governance in the new Chief governance contract. To use tokens for direct voting, holders need to lock SKY into the new Chief, then prepare and vote on proposals. Holders may also delegate voting power to a Vote Delegate V3 compatible with the new Chief. Whether voting directly or delegating, only SKY is counted for weight in the new Chief; the old DSChief and Delegate V2 no longer accumulate voting power after the new Chief is approved.

Question 4

What is the governance-upgrade relationship between SKY and MKR?

Accepted Answer

SKY is the token that assumed MKR's governance function during the upgrade from the MakerDAO governance system to the Sky governance system. In May 2025, the official timeline lists execution of the governance-upgrade spell and the migration launch; after the upgrade, the new Chief uses SKY rather than MKR for all on-chain voting and parameter governance. Therefore, the relationship between MKR and SKY is more than a name change: voting contracts, delegation contracts, and certain staking workflows must all migrate. If old MKR remains locked in an old governance path, it must first exit the old contract, be converted to SKY, and then be locked into the new Chief or a new delegation contract before it can continue to be counted in the new architecture.

Question 5

Which network is SKY deployed on?

Accepted Answer

Official SKY documentation lists the SKY Token and MKR/SKY Converter deployments on Ethereum. Therefore, when interacting directly with the token or converter, Ethereum and the officially published deployment addresses should be used. The ERC-20 standard describes token interface rules on Ethereum; it does not mean that assets with the same name on any other network are identical to the official SKY contract. Before interacting, verify the network, contract address, and whether the interface in use points to an official deployment.

Question 6

How can I participate in SKY governance?

Accepted Answer

The basic path for direct participation in the new governance is: first ensure that the wallet has available SKY, lock it into the new Chief, and then submit voting actions; when withdrawing, free() can be used to return SKY to the wallet. One difference between direct voting and the old DSChief is that the new process no longer requires approving an IOU first. If delegating, use a Vote Delegate V3 connected to the new Chief and re-delegate to that new address. The old Delegate V2 does not continue to count weight in the new Chief, so merely retaining an old delegation relationship does not ensure that voting power remains effective after migration.

Question 7

How is MKR converted to SKY?

Accepted Answer

MKR can be converted into SKY through Sky's MkrSky Converter according to the conversion basis specified by the protocol. The reference conversion is 1 MKR for 24,000 SKY, but the actual net amount received is subject to the conversion fee applicable at the time. The upgraded converter uses the one-way mkrToSky path: MKR can be converted to SKY within the protocol, but SKY can no longer be converted back to MKR through the protocol; to obtain MKR in the reverse direction, official guidance states that external trading venues must be used. Before converting, the converter's current fee parameter should also be read rather than estimating the received amount using only 1:24,000.

Question 8

How is the actual amount received calculated when converting MKR to SKY?

Accepted Answer

The net amount of SKY received from converting MKR can be expressed as: net SKY = MKR amount × 24,000 − conversion fee. The conversion fee equals the gross SKY amount multiplied by the converter's current fee rate; fee is stored in WAD form scaled by 1e18. For example, 24,000 in the formula is the gross SKY basis for each MKR, not a guaranteed net amount received. After the delayed-upgrade penalty takes effect, it reduces the SKY output through the fee; the official timeline states that the penalty began at 1% on September 18, 2025, and is planned to increase by 1% every three months unless governance decides otherwise.

Question 9

How does MKR conversion affect SKY supply?

Accepted Answer

SKY supply handling depends on the converter version used. Converter V1 previously minted SKY on demand; the upgraded Converter V2 is instead preconfigured by governance with sufficient SKY to cover all unconverted MKR. In a V2 conversion transaction, the converter transfers existing SKY directly to the designated recipient address while burning the corresponding MKR. Therefore, what is visible on-chain is a SKY transfer from the converter and an MKR burn, rather than newly minting SKY on the SKY contract for that conversion.

Question 10

Is SKY a stablecoin or a redemption receipt?

Accepted Answer

SKY is not a stablecoin. Stablecoins are typically designed around a target price, reserves or collateral, and redemption mechanisms; SKY's official positioning is as a governance token for voting and parameter governance in the new Chief. Likewise, SKY is not a direct redemption receipt for protocol collateral assets. Its relationship to protocol economic activity should be understood through specific governance rules, the converter, or other separate protocol modules; fixed value or fixed redemption rights cannot be inferred from “governance token.”

Question 11

What are the functions of SKY's permit and EIP-1271?

Accepted Answer

SKY is an ERC-20 with permit functionality and EIP-1271 signature-verification capability. permit allows approvals to be expressed through signatures, reducing the need to send a separate approval transaction in flows that support the standard. EIP-1271 addresses signature-validity verification for smart contract wallets, allowing applications to verify contract-wallet signatures under that standard. These are token-interaction capabilities and do not replace wallet confirmation, network fees, or verification of transaction contents.

Question 12

What should be noted when using or migrating SKY?

Accepted Answer

Before using SKY, first verify the Ethereum network, the official SKY contract, and the converter version being used; when converting, also confirm the direction, current fee parameter, and recipient address. Especially under the upgraded one-way path, converting SKY back to MKR through the in-protocol converter is not possible. If tokens are locked in the old DSChief, Delegate V2, or old LockStake path, they should not be assumed to migrate automatically. The official migration process requires exiting the old position or delegation according to the holding scenario, converting MKR, and then locking into the new contract; positions with debt or unclaimed rewards also have additional prerequisites.

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