USDS (Sky Dollar) (USDS) Reseña

What is USDS? The short answer

What is USDS? It is the dollar stablecoin of Sky Protocol, the project formerly known as MakerDAO, and the successor to DAI. No company issues it. Smart contracts mint USDS against collateral, and holders who deposit it into sUSDS earn the Sky Savings Rate, which was 3.80% on 16 October 2026. That day 7.05 billion USDS existed on Ethereum, alongside 4.72 billion of the older DAI.

Search for USDS and you will also find the US DOGE Service, the White House technology office called the US Digital Service until January 2025, which shares the acronym. This page is about the stablecoin. It covers what backs USDS, where the 3.80% comes from, why its biggest single asset is USDC, and what the lack of an issuer means for US, EU and UK users.

How is USDS different from DAI?

USDS and DAI run on the same Sky balance sheet and convert 1:1 in both directions, with no fee, through Sky's converter contract. Sky launched USDS in September 2024, a few weeks after MakerDAO rebranded as Sky, and most new activity has moved to it since. The differences that matter for a holder:

Sky's figures mix the two. The sky.money app shows "USDS supply 10.23B", which counts USDS and DAI together, and CoinGecko's USDS market value uses the same combined number. On its own, USDS was 7.05 billion on Ethereum on 16 October 2026, read from the contract. Our DAI page covers the older token.

What backs USDS?

USDS is backed by a pool of collateral that Sky's contracts and its "Sky Agents" manage, and about half of it is stablecoins, mostly USDC. The Sky financial dashboard showed $10.11 billion backing circulating USDS and DAI on 16 October 2026:

USDC is the collateral behind $4.38 billion, or 43.3% of that backing, and $4.18 billion of it sits in Sky's peg stability module. So USDS inherits a large share of USDC's risk: when USDC broke its peg in March 2023, DAI fell to $0.88. The rest is spread across other stablecoins such as PYUSD and RLUSD, crypto-backed loans, AAA-rated credit funds and Treasury funds, which Sky allocates through agents such as Spark and Grove.

There is no accountant's attestation, because there is no issuer to attest. Instead, anyone can read most positions on-chain and check them against Sky's public dashboard, which is more open than a monthly PDF but leaves the interpretation to the reader. The off-chain loans and tokenized funds, about a fifth of backing, still depend on borrowers' and fund managers' own reporting.

The cushion is thin. The dashboard's accounting showed assets at 99.63% of liabilities on 16 October, and Sky's own reserves were $76.99 million at the end of August against a $150 million target, per the Sky Frontier Foundation's August update. Sky.money's headline figure of "$16.20B" USDS collateral counts gross collateral including the excess above coverage, so it is not comparable to the $10.11 billion backing figure.

Is USDS safe?

USDS has held its peg closely since early 2025, but its capital buffer is small and its biggest dependency is another company's stablecoin. Two rating agencies have given Sky low, speculative-grade ratings:

• S&P Global rated Sky Protocol B- in August 2025, the first S&P rating of a DeFi protocol, citing depositor concentration, centralised governance and weak risk-adjusted capital, The Block reported.
• Moody's assigned a B3 rating with a stable outlook, announced on 7 October 2026, its first for a stablecoin protocol, per The Block; Sky's announcement calls it a counterparty risk rating. Crypto Briefing put Sky's equity and reserves at about $90 million against roughly $10 billion of managed assets, under 1%.

Governance concentration is the other structural risk. SKY token holders vote on every parameter, from the savings rate to which assets back USDS, and turnout is low. S&P noted in 2025 that founder Rune Christensen controlled about 9% of governance tokens. A listed company, Stablecoin Development Corporation, held about 10% of SKY supply on 2 October 2026, according to its SEC filing.

The code side is stronger. Cantina, ChainSecurity and a Sherlock audit contest reviewed the USDS contracts in 2024, and ChainSecurity and Cantina reviewed the LayerZero bridge code that carries USDS to Solana and Avalanche in October 2025. No exploit of Sky's core contracts has been reported.

Has USDS ever lost its peg?

Not since its launch period. DefiLlama's daily prices show USDS outside $0.99 to $1.01 only between late September and mid-November 2024, its first weeks, when liquidity was thin. Since 1 January 2025 its only daily print outside $0.995 to $1.005 was $1.009 on 2 February 2025.

The history of DAI, which shares the balance sheet, is the better guide to stress:

The 2023 episode is the one to remember. With 43% of backing now tied to USDC, a USDC shock would again reach USDS.

How does the Sky Savings Rate work?

Deposit USDS into sUSDS and its value grows at the Sky Savings Rate, which SKY holders set by vote and Sky pays from protocol surplus. On 16 October 2026 the rate was 3.80% and 4.96 billion USDS sat in sUSDS. Withdrawals are instant, with no fee, through the standard vault interface, according to Sky's developer documentation.

The rate moves. It peaked at 12.50% from December 2024 to February 2025, then drifted down through 2025 and most of 2026 as governance trimmed it step by step, with a few small rises along the way, to a low of 3.52% on 23 July 2026, before rises to 3.60% on 3 September and 3.80% on 7 October.

A DAI holder earns far less: the DAI Savings Rate has been 1.25% since late 2025. Sky also runs separate reward programs that pay in SPK, GROVE or SKY tokens, and because those rewards arrive in volatile tokens rather than USDS, their advertised rates move with token prices and should not be read as the savings rate.

The rate is not a bank's interest. It comes from what Sky earns on loans to crypto borrowers, credit funds and its agents, and it can fall to whatever governance decides. Our guide to stable yield accounts explains how it compares with other dollar yields.

How do you redeem USDS?

There is no fiat redemption. The practical exit is Sky's peg stability module, which swaps USDS for USDC 1:1. On-chain the swap fees in both directions were zero on 16 October 2026, and Sky said on 9 October that more than $4.4 billion of stablecoin liquidity was available there, in its peg stability module explainer. Uniswap has routed trades through it since July 2026. That exit only works while the module holds USDC, and its fees could be switched on by governance.

From USDC you can cash out through an exchange. Coinbase showed a USDS/USD market, limit orders only, on its public trading data on 16 October 2026, and Kraken listed USDS/USD. Crypto.com finished converting customers' DAI to USDS on 16 April 2026, and Coinbase converted its DAI balances to USDS in May 2026.

Sky's emergency shutdown, the old last-resort way to claim collateral directly, can no longer be triggered by holders: the on-chain threshold for that route is set to the maximum value. Governance can still trigger a shutdown by executive vote.

Can USDS be frozen?

Not today. The USDS token contract has no freeze, blacklist or pause function, and its code has not changed since it was deployed in September 2024, based on the implementation address read on-chain and the published source.

But the contract is upgradeable, and that was deliberate. In August 2024 Christensen said USDS would have "no freeze function at launch, just an upgrade ability", leaving room for governance to add one later, Cointelegraph reported. Any upgrade must pass a governance vote and a 48-hour delay. DAI, by contrast, can never be frozen.

Indirectly, freezes still matter. Because 43% of backing is USDC, Circle's ability to freeze USDC applies to a large share of what stands behind USDS.

Is USDS regulated in the US, the EU or the UK?

No. USDS has no licensed issuer anywhere, and that cuts both ways.

• United States. The GENIUS Act defines a payment stablecoin by an issuer's obligation to redeem for a fixed amount of money. USDS has no such issuer, and no regulator has said how the law treats it. From 18 July 2028 US platforms may only offer payment stablecoins from permitted issuers, so US listings of USDS are an open question for then. Sky's app terms do not list the US as a prohibited jurisdiction, but they say some features are unavailable in some places.
• European Union. USDS is not authorised under MiCA and is not on ESMA's register. Coinbase left all EEA users out of its DAI to USDS conversion.
• United Kingdom. The sky.money app's terms list the UK as a prohibited jurisdiction. The FCA's new regime, which takes effect on 25 October 2027, sets stablecoin rules for fiat-backed issuers, and the FCA plans to consult on DeFi guidance in late 2026, per Latham & Watkins.

Which blockchains is USDS on?

USDS is minted only on Ethereum and bridged to six other networks through Sky's own bridges. Almost all of it stays on Ethereum: DefiLlama counted $7.05 billion there on 16 October 2026 and under $9 million on all other chains combined.

You cannot bridge USDS from Ethereum to Avalanche today. USDS already on Avalanche can still return to Ethereum within a shared limit of 5 million USDS a day, so check the bridge status before a large exit.

USDS vs USDC and USDe

USDS sits between the two. Like USDe, it pays a variable yield through a savings token and holds mostly stablecoins and loans, but its rate is set by token-holder vote, and it has almost none of the hedged crypto positions USDe runs. It lacks the issuer, attestation and regulation of USDC, while depending on USDC for much of its liquidity.

How is USDS taxed in the US?

The IRS treats stablecoins as property, so selling or swapping USDS is a taxable disposal, and brokers report sales on Form 1099-DA from 2025, per the IRS digital assets page. The IRS pages we checked say nothing specific about the DAI to USDS conversion or about sUSDS's rising value, so get tax advice before assuming either is tax-free. Our US crypto tax guide covers the general rules.

Who should use USDS?

USDS suits DeFi users who want an on-chain dollar with a savings rate and no freeze function today, and who accept that the rate is set by token holders and that the protocol's capital buffer is thin. It is a natural upgrade for anyone still holding DAI, since conversion is free and the savings rate is higher.

It suits people who need a regulated dollar less. There is no issuer to redeem against, no attestation, and the main exit runs through USDC. If you want a plain dollar, USDC is simpler. To compare yields and risks across coins, see the stablecoin hub, and for the basics, what a stablecoin is.

Sources

1. Sky Protocol on-chain reads (USDS, DAI, sUSDS, Pot, LitePSM, Vat, ESM, End and USDS/sUSDS bridge adapter contracts, plus sUSDS rate-change event history, via Sky's chainlog), block 26207232, 2026-10-16. Accessed 2026-10-16.
2. Sky, sky.money and sUSDS page. Accessed 2026-10-16.
3. Sky Financial Dashboard (BlockAnalitica), backing, supply and accounting data, 2026-10-16. Accessed 2026-10-16.
4. Sky Frontier Foundation, August 2026 financial and operational update, 2026-09-17. Accessed 2026-10-16.
5. Sky, What is the peg stability module, 2026-10-09. Accessed 2026-10-16.
6. Sky developer docs, USDS and sUSDS. Accessed 2026-10-16.
7. Sky, USDS contract source. Accessed 2026-10-16.
8. Skybase International, sky.money terms of use v2.0, 2026-09-01. Accessed 2026-10-16.
9. DefiLlama, USDS supply and chains and daily stablecoin prices, 2026-10-16. Accessed 2026-10-16.
10. The Block, S&P rates Sky Protocol B-, 2025-08-07, and Moody's B3 rating, 2026-10-07. Accessed 2026-10-16.
11. Stablecoin Development Corporation, SEC 8-K exhibit 99.1, filed 2026-10-05. Accessed 2026-10-16.
12. Decrypt, MakerDAO on Black Thursday, 2020-03-20; CoinDesk, DAI depegs, 2023-03-11. Accessed 2026-10-16.
13. Cointelegraph, USDS freeze-function debate, 2024-08-28. Accessed 2026-10-16.
14. US Government Publishing Office, GENIUS Act, Public Law 119-27. Accessed 2026-10-16.
15. IRS, digital assets. Accessed 2026-10-16.
16. CoinGecko, USDS price and market data. Accessed 2026-10-16.
17. The Block, MakerDAO rebrands to Sky, 2024-08-27. Accessed 2026-10-16.
18. Sky Frontier Foundation, Moody's assigns rating to Sky Protocol, 2026-10-07; Crypto Briefing, Moody's B3 rating for Sky Protocol, 2026-10-07. Accessed 2026-10-16.
19. Sky Ecosystem GitHub, audit reports for USDS and the LayerZero bridge. Accessed 2026-10-16.
20. Glassnode, What really happened to MakerDAO, 2020-03-17; The Block, USDC and DAI remain at about $0.90, 2023-03-11. Accessed 2026-10-16.
21. Coinbase Exchange, USDS-USD product data; Kraken, asset pairs. Accessed 2026-10-16.
22. Crypto.com, DAI token rebrand to USDS, updated 2026-04-16. Accessed 2026-10-16.
23. AMBCrypto, Coinbase DAI to USDS conversion timeline, 2026-04-06; DiarioBitcoin, Coinbase to retire DAI in May (EEA exclusion), 2026-04-30. Accessed 2026-10-16.
24. ESMA interim MiCA register, e-money token white papers and asset-referenced token issuers. Accessed 2026-10-16.
25. Latham & Watkins, FCA publishes final rules for UK cryptoasset regime, 2026-06-30. Accessed 2026-10-16.
26. Sky developer docs, USDS Ethereum to Solana bridge; Crypto Economy, USDS and sUSDS launch on Avalanche, 2026-04-16; ChainCatcher, Sky reopens Solana bridging, 2026-05-11. Accessed 2026-10-16.
27. Ethena, sUSDe yield data, 2026-10-14. Accessed 2026-10-16.
28. The White House, executive order renaming the US Digital Service, 2025-01-20. Accessed 2026-10-16.