Key Points
- Sky, the sixth-largest DeFi protocol with $5.5 billion in locked assets, plans to launch its decentralized stablecoin USDS on Solana using Wormhole.
- The expansion includes a short-term liquidity incentive program offering up to 2 million SKY tokens weekly to drive adoption on Solana.
Sky Sets Sights on Solana Expansion
Sky, formerly known as MakerDAO, has announced plans to launch its decentralized stablecoin, USDS, on the Solana blockchain. The announcement was made by Sky’s founder, Rune Christensen, during the Solana Breakpoint conference on September 20, 2024.
Sky, currently ranking as the sixth-largest DeFi protocol with $5.5 billion in total value locked (TVL), aims to leverage Solana’s growing ecosystem to expand its reach and functionality. The integration will be facilitated through the Wormhole interoperability protocol, allowing Sky to bridge its tokens — SKY, USDS, and sUSDS — to the Solana network.
Bridging DeFi Ecosystems
Christensen elaborated on the integration strategy in a post on Sky’s governance forum. He highlighted that while Solana’s market size is not yet comparable to Ethereum’s, it possesses significant growth potential. The Solana blockchain already boasts established DeFi primitives, providing a solid foundation for Sky’s expansion.
The move is expected to fill a crucial gap in Solana’s DeFi landscape by introducing a decentralized stablecoin along with Sky’s unique features, including native savings rates, token rewards, and the ability to deploy large-scale capital within trusted Solana protocols.
Despite the technical challenges posed by the differences between Ethereum Virtual Machine and Solana’s infrastructure, Sky has opted to use Wormhole as a short-term solution. This approach allows the protocol to build early momentum ahead of the full Solana SkyLink deployment.
Incentivizing Adoption with Token Rewards
To drive adoption and create early network effects, Sky is launching a short-term liquidity incentive program on Solana. The program will offer SKY tokens to DeFi integrators and liquidity providers, focusing on two key liquidity areas: USDS/USDC and USDS/sUSDS pairs.
Managed by Accessibility Facilitators, the incentive program will utilize existing systems in major Solana DeFi protocols. It will offer up to 2 million SKY tokens per week, with the flexibility to adjust based on market conditions and community input from both Sky and Solana ecosystems.
These temporary rewards are set to conclude with the launch of Solana SkyLink, after which they will be replaced by Sky’s native token rewards system, featuring SKY, CLE, and SPK tokens.
As the DeFi landscape continues to evolve, Sky’s expansion to Solana marks a significant step towards cross-chain interoperability and the growth of decentralized financial services across multiple blockchain ecosystems.
