Sky, formerly known as MakerDAO, plans to launch its decentralized stablecoin, USDS, on Solana using the Wormhole interoperability protocol.
Sky founder Rune Christensen announced the decision at the Solana Breakpoint conference currently taking place on September 20.
According to data from DefiLlama, Sky is the sixth-largest DeFi protocol, with a total value of assets locked on the platform of $5.5 billion.
Solana Extension
In a post on the DeFi protocol’s governance forum, Christensen explained that this integration would spur rapid expansion and deep integration of Sky on Solana. He added that the protocol’s tokens SKY, USDS and sUSDS will be connected to Solana using Wormhole.
Christensen noted that while Solana is not yet as large as Ethereum, it has the potential to see significant growth. He pointed out that DeFi primitives are already established on Solana, providing the foundation for expansion.
However, what is missing is the decentralized stablecoin and features that Sky offers: native savings rates, token rewards, and the ability to deploy capital at scale within trusted Solana protocols.
He acknowledged the challenges of integrating with Solana due to the differences between the Ethereum Virtual Machine and Solana’s infrastructure. However, using Wormhole as a short-term solution allows Sky to build early momentum before the full deployment of Solana SkyLink.
Incentive program
Sky also plans to launch a short-term liquidity incentive program. This initiative will offer SKY tokens to DeFi integrators and liquidity providers on Solana, creating early network effects for the full deployment of SkyLink.
According to Christensen, the temporary token incentive program will be managed by accessibility facilitators. This program will use existing incentive systems in major DeFi protocols on Solana. Input from the DeFi Sky and Solana communities will guide the program.
He said two key areas of liquidity need to be encouraged – USDS/USDC and USDS/sUSDS – to ensure the stablecoin functions properly on Solana.
The incentive program will offer up to 2 million SKY tokens per week, but accessibility facilitators are advised to use fewer once the initial phase ends. These temporary rewards will end with the launch of Solana SkyLink and will be replaced by Sky’s native token rewards: SKY, CLE, and SPK tokens.
