Sky Deploys USDS Stablecoin on Solana Following Rebrand
The Ethereum DeFi project Sky has deployed its USDS stablecoin on Solana, according to Blockworks.
USDS, previously known as DAI, ranks as the third largest stablecoin by market capitalization, following USDT and USDC. The token was exclusive to Ethereum since its launch in 2017 until this recent deployment.
Sky, formerly Maker, underwent a rebrand in late August as part of an ongoing "endgame" process led by co-founder Rune Christensen, which encompasses several changes to the protocol.
Christensen expressed interest in Solana's technology, suggesting the possibility of creating a new chain using a fork of Solana's code. The USDS will utilize Wormhole’s token transfer framework to become multichain.
Growth for USDS on Solana will be supported through liquidity incentive agreements with platforms such as Jupiter, Orca, Kamino, and Drift, distributing “over 300,000” USDS weekly in incentives.
PayPal's stablecoin adopted a similar strategy when deploying on Solana, offering substantial liquidity incentives to boost market capitalization, particularly on Kamino. However, much of this liquidity diminished once incentives ended, leading to a decline in Solana’s PYUSD market share since August.
Sky and Solana may benefit mutually; Sky seeks community support amid challenges related to its rebranding, while Solana aims to increase its stablecoin market share, currently holding just 2% compared to Ethereum's 51%, according to DeFiLlama.
Deploying on Solana could provide Sky’s community with a renewed focus, while Solana could enhance its ecosystem with the addition of a major stablecoin.
Updated Nov. 19, 2024 at 12:12 pm ET: A prior version incorrectly stated DAI was launched in 2014; it was launched in 2017.