The Rebuilding Journey of Established DeFi Protocols: Interpreting the MakerDAO Brand Upgrade

As one of the earliest DeFi lending protocols on Ethereum, MakerDAO has maintained a significant position in the cryptocurrency space since 2014. Its issued stablecoin DAI currently ranks third in the market, behind USDT and USDC, with a market capitalization of up to $5.36 billion.

Recently, this DeFi giant that has been operating for nearly a decade announced a major decision - a brand upgrade. MakerDAO will be renamed Sky Protocol, while its governance token and stablecoin will undergo a comprehensive upgrade. The governance token MKR will be upgraded to SKY, while the stablecoin DAI will be upgraded to USDS (Sky Dollar).

This decision has attracted widespread attention in the industry. As a leader in the DeFi lending sector, why carry out such a large-scale brand overhaul at this time? This article will delve into the changes brought by this upgrade and its deeper implications.

Brand Restructuring: From MakerDAO to Sky Protocol

This brand upgrade involves multiple aspects, mainly including the following important changes:

1. Governance token upgrade: MKR to SKY

Under the new system, 1 MKR can be exchanged for 24,000 SKY tokens. This fixed ratio ensures that MKR holders can maintain their corresponding governance rights after the conversion. As of the time of writing, the price of MKR is approximately 1913 USDT, corresponding to a split SKY price of 0.0797 USDT.

2. Stablecoin Upgrade: DAI to USDS

The exchange rate between DAI and USDS will be maintained at 1:1 to ensure the continuity of the stablecoin’s value. Users can choose to exchange DAI directly for USDS or seamlessly exchange through ETH, USDC, and USDT on the official website. It is worth noting that the upgraded USDS will have a freezing function, which is a feature that DAI does not possess.

3. Voluntary Participation Principle

The token upgrade is based on a voluntary principle, allowing users to freely choose whether to convert MKR and DAI into the new token. To encourage user participation, the team has introduced a reward mechanism: users who complete the token migration during the testing period will receive 1.25 times the reward in SKY and USDS tokens.

4. Sub-DAO Renaming

As part of the rebranding, Maker SubDAO will be renamed Sky Stars and will continue to operate as an independent decentralized project. Among them, Spark, as the first launched SubDAO, currently provides a 6% yield for users depositing DAI, while allowing users to borrow USDS at a 7% interest rate.

The Deep Reasons for Brand Restructuring

This large-scale brand upgrade is backed by multiple considerations:

1. Addressing Regulatory Challenges: As the global regulatory environment becomes increasingly stringent, decentralized stablecoins face unprecedented pressure. Through brand reimagining, Sky Protocol aims to gain greater flexibility in the new regulatory landscape.

2. Technological Architecture Innovation: The name change is not just a superficial brand change, but also represents a comprehensive upgrade of the underlying technology. By improving smart contracts, optimizing governance mechanisms, and enhancing system scalability, Sky Protocol aims to enhance the overall performance of the protocol.

3. Simplifying brand recognition: To attract a broader user base, especially cryptocurrency newcomers, simplifying the brand name becomes crucial. The name “Sky” is more concise and memorable compared to “MakerDAO,” which aids in the promotion and popularization of stablecoins.

4. Leading Industry Innovation: Through this comprehensive upgrade, Sky Protocol aims to lead the next wave of innovation in the Decentralized Finance sector, providing users with more diversified and convenient financial services.

Conclusion

The rebranding of MakerDAO is not just a simple name change, but a profound transformation in the realm of Decentralized Finance. Through technological upgrades, brand rejuvenation, and functional innovation, Sky Protocol is drawing a new blueprint for the future of decentralized finance. As this transformation progresses, we have reason to expect that the DeFi industry will encounter new development opportunities and challenges.