After seeing DAI market share dwindle, Sky Protocol brainstorms strategies to establish $USDS as the primary trading pair against ETH on DEXes

Sky Protocol, the rebranded MakerDAO ecosystem, is actively debating how to make its new stablecoin USDS the default trading pair against ETH on decentralized exchanges, after watching legacy stablecoin DAI lose market share in DeFi. A recent governance forum post on forum.sky.money outlines the “stablecoin battle” and asks how Sky can reposition USDS so that ETH/USDS becomes the primary route for on-chain trading rather than ETH pairs against competing dollar tokens. The discussion comes after a multi‑year transition in which MakerDAO rebranded to Sky Protocol, introduced USDS as the successor to DAI, and launched the Sky Savings Rate (SSR) and its yield-bearing wrapper sUSDS as core products. USDS is an overcollateralized, dollar‑pegged stablecoin backed by crypto collateral and real‑world asset (RWA) income, with conversion from DAI at 1:1 and broad integrations on major exchanges and DeFi platforms. While sUSDS has found traction as a treasury and yield instrument, the forum post reflects concern that USDS is not yet the dominant liquidity pair for ETH on DEXes, particularly relative to established centralized stablecoins. Establishing USDS as a leading ETH trading pair matters because base trading pairs are a critical source of network effects in DeFi: the more ETH trades route through a given stablecoin, the deeper its liquidity, the tighter its spreads, and the more attractive it becomes for integrators, treasuries, and market makers. The Sky community’s brainstorming therefore centers on strategies such as deepening USDS‑ETH liquidity, aligning incentives around the SSR and sUSDS, and leveraging Sky’s new architecture (including Sky Agents and RWA income streams) to differentiate USDS from USDC and USDT as a “native DeFi” base asset. The outcome of this effort will influence whether Sky Protocol’s stablecoin can reclaim the central role in on-chain markets that DAI once held during earlier stages of DeFi.

✨ AI-generated background, compiled from web sources — not editorial content.

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