Sky, formerly Maker, deploys stablecoin on Solana
The third-largest stablecoin is going multichain for the first time in its seven-year history
Sky co-founder Rune Christensen | Ben Solomon Photo LLC for Blockworks
The longtime Ethereum DeFi giant Sky has deployed its USDS stablecoin on Solana, the protocol told Blockworks exclusively.
USDS, which was formerly known as DAI, is the third largest stablecoin by market capitalization, trailing just USDT and USDC. The token had been exclusive to Ethereum since launching in 2017 leading up to today’s deployment.
Sky was formerly known as Maker prior to its late-August rebrand. It’s all part of the years-long “endgame” process being carried out by Sky co-founder Rune Christensen. The endgame comes with a slew of changes to one of the oldest DeFi protocols.
Christensen has made clear his admiration of Solana, floating the idea of using a fork of Solana’s code to build a new chain in 2023. USDS will be made multichain with the help of Wormhole’s native token transfer framework.
Read more: Wormhole goes multichain with native token transfers
USDS’ growth will be incentivized on Solana through liquidity incentive agreements with the DeFi platforms Jupiter, Orca, Kamino and Drift. Sky said the projects will distribute “over 300,000” USDS weekly in liquidity incentives.
Notably, PayPal’s stablecoin took a similar approach when recently deploying on Solana, shelling out lucrative liquidity incentives to drive market capitalization, particularly on the DeFi platform Kamino. A lot of this liquidity didn’t stick around once the incentives dried up, as Solana’s PYUSD market share has fallen precipitously since August.
But perhaps Solana and Sky meet each other in a position of mutual need. Sky’s rebrand has been bumpy, and community backlash caused the protocol to hold a vote about whether to rebrand a second time (Sky won convincingly in a vote dominated by four whales). And despite the run-up in nearly every Solana metric, Solana’s stablecoin market share has yet to meaningfully increase. The chain holds just 2% of all stablecoins compared to 51% for Ethereum, per DeFiLlama.
For Sky, deploying on the moment’s buzziest blockchain could give its community something to rally behind. And for Solana, gaining access to the third-largest stablecoin could help grow its slice of the pie.
Updated Nov. 19, 2024 at 12:12 pm ET: A prior version of this article stated DAI was launched in 2014. It was launched in 2017.
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