Sky, formerly Maker, launches USDS stablecoin on Solana

Decentralized finance lending and borrowing protocol Sky, formerly known as Maker, has deployed its USDS stablecoin on Solana in an effort to tap into the blockchain’s growing decentralized finance (DeFi) ecosystem. 

Sky said in a Nov. 19 X post that its USDS was “the first major DeFi-native stablecoin on Solana” and would allow new ways for lending, borrowing, and trading across Solana’s “top DeFi platforms.”

“Today’s launch marks the first step in Sky’s strategy to increase Solana’s DeFi liquidity and [total value locked],” it added. Sky said in the future, pending governance approval, it would roll out its SkyLink crosschain bridge for USDS and sUSDS, its “savings” version of the stablecoin. 

USDS is a rebrand of the stablecoin Dai (DAI), which aims to stay at the value of 1 US dollar. Sky also rebranded from Maker in August, and confusion over the change led co-founder Rune Christensen to propose that it go back to its original name, which four whales squashed, so Sky stayed. 

In a bid to get Solana users to take up the rebranded token, Sky is offering rewards for early adopters and stablecoin liquidity providers on various DeFi protocols. 

Kamino Finance users will get to access 200,000 USDS in weekly rewards for USDC/USDS liquidity providers and 100,000 USDS weekly for suppliers of the stablecoin.

Meanwhile, there will be 100,000 USDS rewards available for suppliers of the stablecoin to Drift Protocol. Those supplying the dollar-pegged asset to Save Finance will have the chance to earn a share of 400,000 USDS in monthly rewards. 

The Sky team added that the protocol’s native integration via Wormhole’s Native Token Transfer (NTT) “enables seamless USDS operations on Solana.”

USDS is the third largest stablecoin by market capitalization with $5.3 billion giving it a market share of 2.8% in a market dominated by Tether (USDT $1.00) and USD Coin (USDC $0.9995), which command 88% between them. 

DeFi on Solana has seen big growth this year, with total value locked increasing 487% year-to-date to $8.34 billion, according to DefiLlama. However, Solana’s popularity has primarily been driven by memecoin speculation as it is fast and cheap to create them on the network with launchers such as Pump.fun.

Solana DeFi growth YTD. Source: Defillama

The former governance token, Maker (MKR $1,501.59), has lost 30% since the rebrand when the protocol urged holders to convert to its new token, Sky (SKY). 

The uptake has been slow since the new SKY governance token is not yet listed to trade on exchanges.