Stake SKY to govern, earn, and borrow
SKY is the ecosystem token of Sky Protocol. Stake SKY into the Staking Engine and your position accrues rewards, collateralizes USDS borrowing, and carries voting power.
SKY is a decentralized governance token of Sky Protocol. It is not a security, investment contract, or financial instrument. Sky.money does not control SKY's price, staking rewards, or borrowing terms. All rewards are variable and derived from protocol revenue; borrowing carries liquidation risk.
The Borrow Rate is determined by Sky Ecosystem Governance through a process of community-driven, decentralized onchain voting. Sky.money does not control the SKY token's borrowing terms or the borrow rate. Borrowing carries liquidation risk, monitor your Health Factor regularly.
The power of the SKY token
What is SKY?
SKY is the decentralized governance token that powers the Sky Protocol. It is used to vote on critical decisions like the Sky Savings Rate (SSR) and protocol upgrades, ensuring the system remains resilient.
Beyond governance, SKY is designed for maximum utility. Through the Staking Engine, you can activate three powerful functions simultaneously from a single deposit.
Choose your staking strategy
The staking engine
A flexible, all-in-one smart contract that lets you put your SKY to work without a lockup period. You can earn protocol rewards, borrow USDS, and delegate your voting power, all while maintaining the freedom to unstake whenever you need.
Borrow against your SKY
For SKY stakers, you can access USDS liquidity without losing access to protocol rewards. By using your staked SKY as collateral, you can borrow USDS funded by Sky Protocol’s stUSDS risk capital pool. You can continue to accrue staking rewards and retain your voting power while securing an active loan.
Frequently asked questions about SKY Token
What exactly is the SKY token?
SKY is the decentralized governance token of the Sky Protocol, an ERC-20 token on Ethereum. It allows holders to participate in key decisions, like setting the Sky Savings Rate (SSR), and serves as a high-utility asset that can be staked to earn rewards and used as collateral for USDS borrowing.
Visit the full technical reference at insights.skyeco.com for more details on how the SKY token works at the protocol level. There you’ll find details on the supply mechanics, emission schedule, contract addresses, governance parameters, and staking engine specifications.
How do I participate in governance?
To have your say, you must first stake your tokens at Sky.money. Once staked, you can visit the Sky Governance Portal to view active proposals and cast your votes, join the discussion in the Sky Forum, or delegate your voting power to a specialized delegate who aligns with your views.
s there a risk of liquidation when borrowing?
Yes. Like any collateralized loan, if the price of SKY drops significantly, your position could face liquidation to protect the protocol’s stability. Always monitor your "Health Factor" and ensure you maintain a safe collateral buffer.
Are my rewards automatically restaked?
No. While your rewards accrue in real-time, you must manually claim them. Once claimed, you can choose to add them back into your staked position to increase your principal and compound your future returns.
Where do the SKY staking rewards come from?
Staking rewards are derived from Sky Protocol profits. Profits from stability fees and Sky Agent performance is programmatically used to buy back SKY tokens on the open market, which are then distributed to participants in the SKY Staking Engine.
Does borrowing USDS against my SKY stop my rewards?
Not at all. Your SKY continues to earn 100% of its staking rewards even if you have an active USDS loan. The Staking Engine is designed to let you stay liquid without sacrificing your share of protocol revenue.
Are there lockup periods when I stake my SKY?
No, there are no set time commitments, lockup durations, or amplified voting weights for locking longer. You can withdraw your SKY at any time. SKY Staking also allows users to borrow USDS against their SKY at the SKY Borrow Rate.
What is the maximum supply of SKY tokens?
SKY has a strict maximum supply cap of 23.46 billion tokens, and new emissions are permanently disabled. Because the protocol continually uses its own revenues to buy back SKY tokens from the open market, it places structural deflationary pressure on the circulating liquid supply.
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