Latest Sky (SKY) News Update

Deep Dive

1. @SkyEcosystem: Buybacks Hit 3.28% Supply Bullish

"1.39M USDS used weekly to repurchase SKY – 1.1B tokens removed since program began"
– @SkyEcosystem (234K followers · 1.2M impressions · 18 Aug 2025 2:37 PM UTC)
View original post
What this means: This is bullish for SKY because reducing circulating supply through algorithmic buybacks could create upward price pressure if demand remains steady.

2. @CEX.IO: Migration Countdown Bearish

"Unupgraded MKR faces 1% quarterly penalty after Sep 18 – 56% conversion completed"
– @CEX.IO (892K followers · 3.1M impressions · 15 Aug 2025 12:00 AM UTC)
View original post
What this means: This is bearish for residual MKR holders but neutral for SKY long-term, as forced conversions could increase SKY’s governance participation while creating sell pressure from late upgraders.

3. @SPGlobal: Credit Rating Flags Risks Mixed

"B- rating cites depositor concentration and weak capitalization despite $700M treasury"
– @SPGlobal (1.1M followers · 4.8M impressions · 12 Aug 2025 3:44 PM UTC)
View original post
What this means: This is mixed for SKY – while institutional validation boosts credibility, identified risks could deter conservative investors despite 230% price YTD gains.

Conclusion

The consensus on SKY is mixed, with deflationary mechanics and staking demand (947M SKY locked) offset by S&P’s governance concerns. Watch the MKR conversion rate – crossing 60% before September’s penalty phase could signal strengthening network effects.

Deep Dive

1. MKR Futures Delisting (5 September 2025)

Overview: KuCoin delisted MKRUSDT perpetual futures on 5 September 2025, citing MakerDAO’s rebranding to Sky (SKY). New positions were blocked from 4 September, with settlements based on the 30-minute average index price pre-delisting. Similar moves occurred on Ourbit, Bitget, and MEXC, aligning with the 1:24,000 MKR-to-SKY swap ratio.
What this means: Neutral for SKY – while delistings reduce legacy MKR liquidity, they formalize SKY’s role as the sole governance token. Traders must monitor SKY’s post-swap exchange support. (KuCoin)

2. PrimeXBT Rebranding Shift (10 September 2025)

Overview: PrimeXBT will close all MKR positions by 10 September 2025, transitioning exclusively to SKY. The platform warned users to settle MKR trades before the 9 September close-only deadline to avoid forced liquidation at market rates.
What this means: Bullish for SKY – centralized exchanges phasing out MKR accelerate adoption of SKY as the ecosystem’s backbone. However, unupgraded MKR holders face penalties starting 18 September. (PrimeXBT)

3. S&P Global’s B- Rating (12 August 2025)

Overview: S&P assigned Sky Protocol a “B-” credit rating, citing weak capitalization (0.4% capital ratio), centralized governance, and regulatory uncertainty. It noted $3B in Sky Savings Rate deposits and $7.6B USDS supply as strengths.
What this means: Bearish short-term – the rating highlights systemic risks, but Sky’s $1.2B treasury and institutional RWA integrations (e.g., Grove’s $1B CLO strategy) could offset concerns. (The Defiant)

Conclusion

Sky’s pivot from MKR faces logistical hurdles but solidifies its governance overhaul, while institutional scrutiny tests its DeFi resilience. Will SKY’s buybacks (1.1B tokens burned) and staking rewards ($21M distributed) counterbalance S&P’s warnings?

Deep Dive

1. LockStake Engine V2 (11 August 2025)

Overview: Replaces MKR with SKY as collateral, simplifies staking, and adds a migration tool for legacy positions.
The engine now uses SKY directly (no MKR conversions), eliminating oracle dependencies. Users can migrate V1 staking positions via LockstakeMigrator, which handles debt via flash loans. Exit fees are fixed at 0%, and governance cannot alter post-deployment.
What this means: This is bullish for SKY because it reduces complexity for stakers, lowers risks from oracle failures, and incentivizes migration ahead of penalties. (Source)

2. MKR-SKY Converter V2 (28 July 2025)

Overview: Enforces irreversible MKR→SKY conversions with a governance-controlled fee.
The upgrade removes SKY→MKR functionality, locking conversions to one direction. A 0% fee is initially set, but governance can adjust it later. Pre-minted SKY tokens ensure liquidity for all outstanding MKR.
What this means: This is neutral for SKY as it accelerates MKR sunsetting but introduces fee uncertainty. The penalty for delayed upgrades (starting 18 September 2025) adds urgency. (Source)

3. Chief Contract Upgrade (19 May 2025)

Overview: Overhauls voting mechanics to deter flash-loan attacks.
A cooldown period prevents rapid lift actions (granting authority status), and flash loans can’t manipulate votes within the same block. IOU tokens are eliminated, simplifying governance participation.
What this means: This is bullish for SKY because it strengthens governance integrity, reducing systemic risks from malicious actors. (Source)

Conclusion

Sky’s codebase prioritizes secure governance, efficient MKR migration, and frictionless staking. With 56% of MKR already upgraded, will the September 18 penalty deadline catalyze full adoption?

Deep Dive

1. Delayed Upgrade Penalty (18 Sep 2025)

Overview:
A 1% penalty on MKR-to-SKY conversions begins on September 18, 2025, escalating by 1% every three months. This enforces migration compliance, as only 56% of MKR has upgraded to SKY as of August 2025 (Upgrade Timeline).

What this means:
This is neutral-to-bearish for SKY short-term, as penalties could pressure remaining MKR holders to sell, but bullish long-term by reducing legacy token overhang. Watch MKR/SKY conversion rates and exchange delistings (e.g., Binance).

2. Penalty Ramp-Up (Dec 2025)

Overview:
The penalty increases to 2% in December 2025 unless governance intervenes. This phased approach aims to incentivize timely upgrades while avoiding market shocks.

What this means:
Bullish for SKY’s governance cohesion, as penalties align tokenholder incentives. However, delayed upgrades risk fragmenting voting power and liquidity.

3. Powerhouse Spin-Off (In Progress)

Overview:
The Powerhouse Spin-Off (39% complete) seeks to transform Sky’s infrastructure arm into an independent entity with its own tokenomics and governance. Key steps include legal structuring, token modeling, and community engagement (Roadmap).

What this means:
Bullish if successful, as it could unlock new revenue streams and partnerships. Risks include execution delays and diluted focus on core protocol stability.

Conclusion

Sky’s roadmap balances migration enforcement with ecosystem growth, prioritizing tokenholder alignment and infrastructure independence. The September penalty deadline and Powerhouse spin-off are critical inflection points. How might SKY’s staking rewards (currently $21M distributed) evolve as the ecosystem matures?