MakerDAO considers abandoning the new crypto brand Sky

The well-known crypto project MakerDAO, after recently rebranding to Sky, is considering backtracking and evaluating other options.

The marketing strategy of the rebranding did not produce the expected results, and indeed, it led to a crash in the price of the new token SKY.

In the meantime, the stablecoin USDS, heir to the throne of DAI, records good on-chain metrics.

Let’s see all the details below.

MakerDAO and the recent rebranding of the crypto project into Sky

At the end of August, MakerDAO, a historic crypto DeFi protocol worth 4.4 billion dollars, had announced a strategic name change by formalizing the brand Sky.

The idea, which is part of the “Endgame” plan by founder Rune Christensen, was to tackle the growing competition in the blockchain market with a new identity.

Given the emergence of a wide range of successful applications, capable of attracting a lot of activity, MakerDAO needed something to revitalize its ecosystem.

Usually these operations create the pretext to make people talk about themselves, indirectly creating engagement among the crypto community.

In tutto ciò sono state organizzate in parallelo delle campagne incentivi, per portare nuovi fondi su Sky in cambio di yield.

With the rebranding to Sky, the project then aimed to transform the protocol into a more decentralized, secure, and user-friendly ecosystem.

The launch was accompanied by the inauguration of a new website with a cleaner and more intuitive front-end.

The renewal of MakerDAO also included a transition of the crypto MKR, which indeed became SKY.

The holders of the old token (still in use) can perform the switch to the new asset with a ratio of 1:24,000. For each MKR redeemed, they receive 24,000 SKY.

DAI, the decentralized stablecoin of the ecosystem, has also evolved into USDS with a 1:1 ratio, unlocking new on-chain features.

There have been implications also for the “Maker SubDAOs,” independent protocol units (like Spark) that have been renamed “Sky Stars.”

During this delicate transition of MakerDAO, Rune Christensen addressed his community with enthusiasm stating that:

“Sky represents the complete transformation of Maker, encompassing all the knowledge that the organization has gathered over the years.”

The decline of the crypto SKY since its launch in September: the technique of high circulation has failed

Despite MakerDAO’s ambitious plans, things did not go as hoped, and the crypto rebranding in Sky was labeled as a failure.

From a speculative point of view, changing the name of one’s governance token from MKR to SKY has indeed not helped to push the quotations upwards in the market.

Since September 24, the day of the debut on the market of the new crypto, the prices have fallen by 26.8% going from 0.066 to 0.049 dollars.

The performance of SKY/MKR has been significantly lower compared to those of Bitcoin and other altcoins in the DeFi landscape such as AAVE, UNI and LINK.

Source: https://coinmarketcap.com/currencies/sky/

With the name change move, MakerDAO tried to leverage, unsuccessfully, a psychological mechanism inherent in the world of trading.

Let’s talk about the tendency of investors to consider a token with a low price as cheaper and more convenient rather than one with a high price.

Although the value of the cryptocurrency is determined solely by the capitalization, several people mistakenly believe that if an asset has a low base price, it could grow exponentially.

This is the same concept used in the memecoin world, and that is why these coins are listed with several zeros after the comma.

MKR has in fact a quotation of 1,175 dollars  which makes it psychologically “incompatible” with a growth scenario.

Despite this, this technique has failed: justifying a price below the dollar for the new token SKY with a high circulation did not help bring prosperity to MakerDAO.

We remind you that the total supply of SKY is 23.4 billion tokens compared to that of MKR which is 1 million pieces.

Perhaps by now the users of the crypto world have understood this trick and have not been fooled. Or MakerDAO has seen a departure of a part of the community because they are not happy with the latest changes to the project.

MakerDAO considers retracing its steps and reclaiming the Maker brand

Given the initial failure of the rebranding strategy, MakerDAO is now considering the possibility of abandoning SKY and returning to its crypto origins.

The founder Rune Christensen realized that his team used a risky and excessive marketing leverage for the project’s values.

The same has been acknowledged regarding how respected the Maker brand is in the DeFi world, highlighting the possibility of a reversal. Here is what was reported in the MakerDAO governance forum:

“Now it is clearer than ever how much the DeFi community loves and trusts the Maker brand. There was a lot of affinity for the brand and what it represents: stability, security, and DeFi scale. And there is a lot of commitment to maintaining the MKR token compared to the upgrade to SKY”.

In the first month, a total of 78,300 MKR were redeemed in favor of approximately 2 billion SKY, against the remaining 899,000 MKR circulating on the Ethereum network.

This demonstrates how resilient users are in making the switch, and they prefer to keep the old name.

Christensen stated that several avenues have been considered to address the problem.

First and foremost, the option to continue with the Sky brand was considered, and to enhance its momentum with new initiatives in favor of the community.

Another possibility, on the other hand, involves resuming the old name MKR as the only governance token and bringing Maker back to its original values.

Finally, the last idea is to update another new brand that fully aligns with the trust and stability of the crypto ecosystem.

USDS: the new pseudo-decentralized stablecoin by MakerDAO and the incentives of the Sky ecosystem

Perhaps the failure of the debut of the Sky brand is partly due to the opposition of the MakerDAO community towards a controversial crypto update.

Simultaneously with the rebranding of the logo and the governance token MKR, a new stablecoin in place of DAI was also introduced.

The MakerDAO team has wisely decided to rename the coin to USDS, with a 1:1 conversion rate.

This transition, however, includes new centralization features for the stablecoin, which effectively loses one of its most distinctive traits.

In fact, the feature of “freezing” assets at a given address has been introduced at the discretion of the code holder.

Just as Tether does, therefore, MakerDAO could also select an address with a balance in USDS and decide to block it for arbitrary reasons.

Although this function is solely used in the event of a hack or serious security incidents, it still remains a flaw in the concept of decentralization.

Despite this, USDS offers incentives to users who want to embrace the rebranding, with a 6.5% APR on the deposit through the “Sky Saving Rate” platform.

Christensen has announced that on November 4th MakerDAO will host a community call to gather feedback on the re-brand and assess future moves.