USDS, launched in August 2024 as a rebrand of DAI, is a decentralized, USD-pegged stablecoin within the Sky Ecosystem, formerly MakerDAO, built on Ethereum. USDS is collateral-backed by assets like ETH and real-world assets (RWAs), minted through over-collateralized vaults, and serves as the native currency for the Sky Protocol’s DeFi applications. It powers lending, borrowing, and yield-generating opportunities across multiple blockchains, with rewards for stakers via Sky Token Rewards.

Key Features

  • Stablecoin: Pegged 1:1 to the USD, ensuring price stability for DeFi transactions and payments.
  • Decentralized: Backed by over-collateralized crypto and RWAs, governed by SKY token holders, not a central entity.
  • Multichain: Deployed on Ethereum, Base, Arbitrum, Solana, and Optimism, with $5.6 billion in circulation.
  • Sky Token Rewards: Stakers earn SKY, SPK (from Spark sub-DAO), and Chronicle Labs points, enhancing yield.

USDS Token

  • Purpose: Used for DeFi lending, borrowing, trading, and staking to earn rewards.
  • Supply: Circulating supply of ~7.3 billion USDS, with no fixed cap as minting depends on vault activity.
  • Contract Address: 0xdc035d45d973e3ec169d2276ddab16f1e407384f (Ethereum, addable to MetaMask).

Who Are the Founders of USDS?

USDS inherits the foundation of MakerDAO, founded by Rune Christensen in 2014. Christensen pioneered DAI, the precursor to USDS, as a decentralized stablecoin. The rebrand to USDS, part of the Sky Ecosystem’s “Endgame” plan announced in August 2024, was driven by the MakerDAO community and core team to enhance scalability and governance. The Sky Ecosystem is now fully community-governed via SKY tokens.

What Makes USDS Unique?

USDS stands out for its decentralized stability and ecosystem integration:

  • Robust Backing: Over-collateralized by ETH and RWAs, ensuring resilience against market volatility.
  • Endgame Flywheel: Integrates with SKY and sub-DAO tokens (e.g., SPK) to drive demand and supply, powering DeFi expansion.
  • Multichain Yield: Offers high rewards, e.g., ~7.5% on Base via GrowCompound and ~4.5% on Optimism via Spark, making it a top stablecoin for yield farming.
  • Protocol Liquidity: Sky’s reserves provide instant liquidity for new DeFi products, reducing reliance on external capital.

USDS’s $5.6 billion TVL and multichain presence position it as a leading stablecoin, rivaling USDC and USDT.

USDS Network Upgrades (2025)

  • Endgame Launch (2024–2025): Rebranded DAI to USDS, introducing sub-DAOs like Spark and protocol-controlled liquidity for scalability.
  • Sky Savings Rate (Q2 2025): Distributed over 2.16M USDS in rewards in the past week, capturing 18% of DeFi stablecoin rewards.
  • Multichain Expansion: Integrated with Base, Solana, and Optimism, with Raydium (USDS/USDC) seeing $9.19M in 24-hour volume.

USDS and Sustainability

USDS operates on Ethereum’s proof-of-stake and other PoS chains, reducing energy use by ~99% compared to proof-of-work blockchains. While no specific carbon neutrality initiatives are reported, the Sky Ecosystem’s alignment with eco-friendly blockchains minimizes environmental impact.

How Is USDS Secured?

USDS leverages robust security mechanisms:

  • Ethereum PoS: Secured by Ethereum’s proof-of-stake, with validators staking ETH for transaction integrity.
  • Over-Collateralization: Vaults require 150%+ collateral (e.g., ETH, RWAs), audited for stability.
  • Governance: SKY holders vote on risk parameters, ensuring decentralized control.
  • Sub-DAO Security: Spark and other sub-DAOs inherit Ethereum’s security while adding governance layers.

Conclusion

USDS is a decentralized, USD-pegged stablecoin driving the Sky Ecosystem’s DeFi ambitions. Its robust backing, multichain rewards, and Endgame upgrades make it a top choice for lending, borrowing, and yield farming. As of June 2025, USDS’s $7.3 billion market cap and high yields signal strong adoption.