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Sky Protocol’s governance token, SKY, has experienced a significant price increase over the past 24 hours, climbing by more than 8% as staking rewards for the token officially went live. This development marks an important milestone for the decentralized finance (DeFi) platform as it continues to attract attention within the cryptocurrency space.
SKY Token Price Surges Amid Staking Rewards Launch
The SKY token, which recently became the exclusive governance token of the Sky Ecosystem following a rebranding from its predecessor, MKR, has emerged as one of the top gainers in the market. The token’s price surged to a high of $0.073, largely driven by the platform’s announcement of staking rewards for SKY holders in the form of USDS stablecoin payouts.
According to the announcement, SKY stakers can now earn USDS rewards based on the protocol’s performance. Additionally, stakers retain their governance rights, allowing them to participate in decision-making processes through direct voting or delegation.
“SKY stakers gain access to USDS rewards based on protocol performance, while continuing to participate in governance through direct voting or delegation.”
Strong Recovery Following Market Downturn
Following the broader market dip on May 29, where SKY fell to $0.065, the token has rebounded sharply, reaching $0.073 before stabilizing near $0.070 at the time of writing. While some profit-taking has been observed, the launch of staking rewards has provided a strong catalyst for this recovery.
How SKY Staking Works
Staking for SKY became available after the protocol officially transitioned SKY into its sole governance token on May 19. To participate in staking and governance, users must upgrade their MKR tokens to SKY tokens. The migration process allows MKR holders to continue engaging with the protocol while earning staking rewards.
With the introduction of USDS rewards, token holders can now earn up to half of the surplus USDS revenue generated by Sky Protocol. This new system incentivizes staking and aligns rewards with the protocol’s overall performance, offering potential long-term benefits for participants.
What Is USDS?
The USDS stablecoin, previously known as DAI, is the upgraded stablecoin within the Sky Protocol ecosystem. Like its predecessor, USDS is pegged to the U.S. dollar, providing stability for users. Participants in the network can earn rewards through Sky’s Savings Rate while maintaining full control of their assets.
MKR to SKY Token Swap Details
MKR holders have the opportunity to swap their tokens for SKY at a fixed rate of 1 MKR for 24,000 SKY. However, users should note that a time-based penalty will be implemented starting September 18, 2025, for those who have not completed the upgrade by this date. As of now, the MKR token is trading at $1,679.
Sky Protocol’s Position in the DeFi Space
Despite its rebranding from Maker, Sky Protocol remains a prominent player in the DeFi lending sector. The platform currently boasts a total value locked (TVL) of $5.21 billion, solidifying its position as one of the leading protocols in the space.
With staking rewards live and the successful transition to SKY governance, Sky Protocol continues to innovate and provide value to its users, ensuring its relevance in the rapidly evolving cryptocurrency market.
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