USDS
Web3 / cryptocurrency types
USDS is the new stablecoin issued by Sky (formerly MakerDAO) as the successor to DAI, introduced during the protocol's "Endgame" rebranding. USDS maintains the same collateralization model as its predecessor, backed by a diversified basket of crypto assets and real-world assets held in Sky's smart contracts. The stablecoin is minted when users deposit collateral into Sky vaults and burned when they repay their loans, creating a supply mechanism directly tied to actual collateral holdings. USDS incorporates stability mechanisms including collateral diversification, liquidation procedures, and dynamic stability fees to maintain its peg to the US dollar while offering users a decentralized alternative to custodial stablecoins. Example: A user deposits Ethereum, Lido stETH, and real-world asset tokens into a Sky vault, generating USDS stablecoins with a collateralization ratio of 150 percent, then uses USDS across DeFi protocols as a stable medium of exchange. Why it matters for cryptocurrency: USDS represents the evolution of decentralized stablecoins, emphasizing real-world asset backing and institutional credibility. It shapes how protocols balance decentralization with stability, influencing stablecoin design across the industry.
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