USDS
Sky's flagship stablecoin — the upgraded successor to DAI with a built-in savings rate.
USDS is the primary stablecoin issued by Sky Protocol (formerly MakerDAO), launched in August 2024 as the Endgame rebrand's flagship product alongside the SKY governance token. USDS is convertible 1:1 from DAI via Sky's official converter at no cost, and the underlying collateral pool (ETH, wstETH, USDC via PSM, tokenized Treasuries) is identical for both tokens. USDS supply exceeded $9B in early 2026 per DeFiLlama (combined DAI + USDS ~$13B), making Sky the third-largest dollar stablecoin issuer. The killer feature is sUSDS: depositing USDS into Sky's Savings Module earns the Sky Savings Rate (SSR), set at 3.75% APY as of Q2 2026 by governance and funded by real protocol revenue — not token emissions.
- USDS supply approximately $9B in early 2026 per DeFiLlama (Sky page); DAI supply approximately $4.6B — combined, the third-largest USD stablecoin issuer after Tether and Circle.
- Sky Savings Rate (SSR) at 3.75% APY in Q2 2026, funded by RWA yields (tokenized Treasuries), Spark borrow interest, and crypto-collateral fees — no inflationary emissions.
- On April 7, 2026, Binance converted all customer DAI balances to USDS at 1:1, the largest single DAI-to-USDS conversion event to date.
- USDS launched natively on Solana in November 2024 and on Base in 2025; SkyLink cross-chain bridge for USDS and sUSDS is pending governance approval for further chain expansion.
- USDS includes a freeze function (absent from DAI's original contract) that lets Sky governance comply with regulatory orders — a notable departure from DAI's fully non-custodial design.
Frequently asked questions
Should I upgrade my DAI to USDS?
The economic exposure is identical: both represent the same claim on Sky's collateral pool. The practical differences are: (1) USDS integrates directly with sUSDS for the savings rate, while DAI uses the older DSR; (2) USDS has an address-level freeze function that DAI lacks; (3) most new Sky-ecosystem developments (Spark, sUSDS, Stargate integrations) target USDS first. For mainnet and Base users, upgrading makes sense; for L2 and alt-L1 users, DAI may still have deeper native liquidity.
How is sUSDS yield different from a money market fund?
sUSDS APY (3.75% as of Q2 2026) is funded by real protocol revenue — RWA Treasury yields, borrow rates, and protocol fees — not token inflation. This makes it structurally similar to a money market fund payout, except the intermediary is a DAO smart contract rather than a bank or fund manager. The key risks are smart-contract risk, governance risk on the SSR rate, and USDC pass-through risk (much of Sky's PSM holds USDC, which adds Circle's freeze capability to the risk surface).
Is USDS truly decentralized?
USDS is more centralized than DAI was at its original design: it includes a freeze function in the token contract, a significant portion of backing is USDC (freezable by Circle), and a large share of collateral is tokenized Treasuries operated by custodians. Sky remains onchain-governed and does not have a corporate owner, but calling USDS 'decentralized' in the strict sense overstates the current architecture.