On August 27, 2024, MakerDAO announced a major rebranding, changing its name to Sky and renaming its stablecoin DAI to USDS. As part of the rebranding, the protocol also introduced a new governance token, SKY, to advance decentralized finance accessibility, marking what the company calls “the next evolution of DeFi.”
The rebranding is part of a comprehensive plan led by MakerDAO co-founder Rune Christensen, and early indicators show that it’s off to a strong start. Just five days after its official launch, USDS reached a total value locked (TVL) of $490 million. This growth was driven by two key factors: a 6.25% interest rate for USDS holders and a DeFi alliance with lending giant Aave, offering additional rewards for borrowing and depositing USDS.
To put this into perspective, PayPal’s PYUSD stablecoin took over a year to reach a TVL of $400 million, highlighting the rapid success of USDS.
The stablecoin market, now worth $173 billion, is becoming increasingly competitive. New players like Ripple and fintech platforms like Revolut are entering the market, as issuers profit from US government bond investments. For instance, Tether reported a $5.2 billion profit in the first half of 2024.
Given the potential for substantial profits in a high-interest environment, stablecoin issuers are increasingly investing in government bonds to back their tokens.
Related news: BitGo Joins the Stablecoin Market by Launching a Reward-based USDS
