‘End of an era?’ Mixed views as Maker rebrands to Sky

As a researcher with years of experience in the crypto space, I find the Maker rebrand to Sky intriguing. The dual stablecoin offering and new SKY governance tokens seem like strategic moves to boost usage, but the immediate impact on MKR has been significant – a double-digit tank in its price.

2014-founded Maker, a trailblazer in decentralized finance (DeFi) lending on the Ethereum network, has decided to change its name to ‘Sky’ in an effort to increase user engagement.

The MKR token, which is indigenous to it, serves as the governance token, whereas the decentralized stablecoin, Dai (DAI), contributes to the system as a means of transaction within the Maker platform.

The two tokens have been widely used for about a decade. However, the rebrand comes with key upgrades, including a new stablecoin (USDS) and governance token (SKY).

‘The current DAI and MKR tokens will stay as they are, giving holders the opportunity to exchange each DAI token for a dollar of USDS, while one MKR token can be exchanged for approximately 28,000 SKY tokens. On September 18th, trading for both USDS and SKY will become available.’

Am ‘end of an era’ for Maker?

In response to the rebranding, Uniswap’s founder, Hayden Adams, described it as the “conclusion of an era.” He stated that this change marks a significant milestone.

‘End of an era. MKR and DAI were two of the very first tokens to get traction on Uniswap v1’

Nevertheless, some market analysts considered this action as marking the ‘end of an era’ and a fatal blow to Maker’s supremacy. One of these analysts, Millie, expressed her view that this move represented Maker’s ‘decline into insignificance.’

‘In due course, DAI’s unique competitive advantage – or ‘moat’ – will vanish, making way for more dependable alternatives that surpass it significantly, including options like USDC. This signals the waning of DAI’s period of uncontested supremacy.’

For context, most contention has been linked to the new stablecoin USDS, designed with a freeze function like centralized stablecoins USDC and USDT. In short, USDS users can be censored.

Another user claimed the rebranding was death for DAI.

‘DAI is currently transitioning to USDS, a stablecoin that can be censored, which contradicts its initial mission. Farewell DAI, from 2017 to 2024.’

As an analyst, I’d like to clarify a point regarding the upgrades from DAI to USDS: This transition is indeed optional. Notably, only the USDS token comes with a freeze function, which could potentially be beneficial in certain circumstances. Rune Christensen, co-founder of Maker, made this distinction clear.

‘Dai will carry on functioning as usual, without any changes required, and can still be utilized. The upgrade to USDS is entirely optional, with only USDS offering a freeze function. It’s important to note that Dai is an unchangeable smart contract and cannot be modified in any way.’

In a proposal made in May, the concept of a two-tier stablecoin system was presented with the aim of fostering widespread acceptance and adhering to regulatory guidelines. The ultimate objective was to phase out DAI once USDS and ‘PureDai’ achieved broad adoption, as hinted at in the May update.

In due course, it’s anticipated that Dai will be completely phased out once all users and integrations have transitioned to either NewStable (USDS) or PureDai. The exact timeframe for this transition will hinge on the speed at which the ecosystem adopts these alternatives.

MKR drops double-digits

‘End of an era?’ Mixed views as Maker rebrands to Sky

Following our company’s rebranding on Wednesday, the stock price of MKR declined by approximately 12%. This brought the price down from $2,100 to $1,900 as of the current moment. The decline could potentially be related to recent setbacks in the Bitcoin [BTC] market as well.

However, it remains to be seen how MKR’s price will react to the rebrand in the short term.

2024-08-28 16:08

Am ‘end of an era’ for Maker?

MKR drops double-digits

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