The credit system behind DAI, and the original test of decentralized stablecoin design.
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$6,292.31 -76.33% · May 3, 2021
Source: CoinGecko, snapshot of Oct 28, 2026. Figures may be delayed.
This asset is not mapped to a DefiLlama-tracked protocol or chain, or the provider reports no data for it. When a verified mapping exists, the table appears here.
Maker, now operating under the Sky brand, issues a dollar stablecoin created by users locking collateral rather than by a company holding bank deposits. It was the first serious attempt at a stablecoin that did not depend on a single issuer, and its evolution is instructive: over time a substantial share of its backing moved toward centralized stablecoins and real-world assets, which improved stability while diluting the original decentralization claim.
The token is the system's equity and its shock absorber at the same time.
Collateral composition is the real story: how much is actually decentralized?
Revenue-funded buybacks are a rarer and more concrete value link than most DeFi tokens offer.
Users lock collateral into a vault and mint stablecoins against it, paying a stability fee on the debt. If collateral value falls below the required ratio, the vault is auctioned to repay the debt. The governance token sits at the bottom of this structure: if auctions fail to cover the debt, new governance tokens are minted and sold to recapitalize the system, so holders bear the ultimate loss.
Governance over collateral types, fees and debt ceilings
Recapitalization instrument minted if the system takes on bad debt
Beneficiary of buybacks funded by protocol revenue
This is a genuinely two-sided token. Stability fees and returns on the protocol's assets fund buybacks that remove supply, so a profitable protocol shrinks the token count. But the same token is the recapitalization instrument: a bad debt event mints new supply and dilutes holders. Holding it is therefore a leveraged position on the protocol's risk management, in both directions.
DAI has no supply cap: it exists only while someone has locked collateral and drawn debt against it, so supply expands and contracts with borrowing demand. Since the 2024 rebrand to Sky, DAI is migrating into USDS under the same mechanism, and the protocol's collateral portfolio is now dominated by real-world assets — short-term US Treasury exposure through qualified custodians. MKR (migrating to SKY) has a fixed total just over one million tokens; the legacy stability-fee mechanism burned MKR when risk parameters were profitable, and the Endgame transition redirects protocol revenue toward Sky ecosystem incentives.
Token holders vote on collateral types, stability fees, debt ceilings and the savings rate paid to stablecoin holders. These votes determine the risk profile of the entire system. The most consequential governance decisions in its history have been about how much centralized collateral to accept, which trades resilience against censorship for resilience against depegging.
Dilution: bad debt triggers minting of new governance tokens, directly harming holders.
Collateral centralization: heavy reliance on centralized stablecoins reintroduces the censorship risk the design set out to avoid.
Real-world asset exposure brings counterparty and legal risk that is hard to assess onchain.
Governance complexity is very high, which limits meaningful participation to a small group.
Brand and structural changes under the Sky transition add execution and communication risk.
Less than its original design intended. A significant portion of its backing has come from centralized stablecoins and real-world assets, which means it inherits some of the censorship and counterparty risk those carry. It remains more decentralized than a single-issuer stablecoin, but describing it as fully decentralized would overstate the current reality.
Vaults that cross their liquidation ratio are auctioned, with penalties feeding a surplus buffer that absorbs bad debt. In extreme failures the protocol can run debt auctions, diluting MKR/SKY holders to recapitalize — holders are the last line of defense, which is the core risk of holding the governance token.
Last verified:
Maker · sky.money · primary source
The project's official site, retrieved on the date shown, supporting how it describes itself. It does not establish supply, governance or issuance mechanics.
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