jakiro
Original title: Buy mkr now Thank me later
Author: ponyo, Four Pillars; Translation: Bit Chain Vision Xiaozou
Abstract:
Sky (formerly known as MakerDao) token price has returned to the early level, that is, the $ 1,100 to $ 1,300 before the short bull market last year.This decline is mainly due to the recent performance of Defi and Ethereum. Its brand reinvention has the emergence of uncertainty and powerful competitors Ethena.
However, the timing of change has matured.SKY’s strategic measures are accumulating cavities. Recently, catalysts can promote the development momentum at any time, mainly including Seal module (activation cost switch), strict shrinking token economics, SKY’s Solana release, and highly anticipated Sky Aave Force integration.
With strong income growth and attractive valuation, Sky continues to be in a leading position in the field of decentralized stabilization currency.It’s time to notice this: With the development of DEFI’s revival, Sky is ready to go, ready to stand at the forefront.
1. Introduction
The eye -catching protagonist of the encrypted market is still artificial intelligence and MEME coins. At the same time, Sky (formerly known as MakerDao) seems to have fallen from the past altar.This transformation is reflected in the price of MKR. As of November 5, 2023, the price of MKR has fallen to 1,100 US dollars to $ 1,300, which is the level before the short bull market last year.This downward trend highlights such a view that MKR may no longer attract investors’ attention.
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However, it is worth thinking about whether this view accurately reflects Sky’s current and future potential.This article will discuss the fundamental reasons for MKR’s recent performance, and put forward that Sky will regain this view and reason.By studying the recent achievements of SKY, the transformation of the upcoming token economics, and the longest and most trusted decentralized stable currency as the longest history, our goal is to put forwardA convincing basis.
2. What are the factors that lead to the poor performance of MKR in the near future?
2.1 Different reactions of the community to the brand to reshape the brand
On September 18, 2023, MakerDao completed the long -awaited Sky brand to reshape, marking a milestone of the project Endgame roadmap.SKY’s long -term route map Endgame was approved by the company’s management in August 2022, which aims to consolidate Sky’s leading position in the DEFI field and eventually expand DAI issuance to $ 100 billion.During the period, Makerdao launched the front end of the improvement, optimized UI/UX, renamed MKR to Sky, renamed DAI to USDS, and set the exchange rate of MKR and Sky on Sky.money to 1:24 000.In order to further encourage the exchange of DAI to USDS, the project also introduced incentive measures such as Sky token rewards.
However, the community’s response to the brand’s reshaping is mixed.Some members attach great importance to the trust of the MakerDao brand and choose to retain their original tokens.
“How much love and trust in the MAKER brand is more clear than ever.What it represents is loved by people -stability, security and DEFI scale.Many people continue to hold MKR and will not upgrade to Sky.“——Sky
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A more complicated situation is that Sky founder Rune Christensn confirmed that the initial MKR and DAI tokens will continue to be effective, which brings more uncertainty to the role and effectiveness of the new token.What matters worse is that the centralized exchange such as Coinbase announced that they will not support SKY migration, which exacerbates concerns about whether the brand can be widely accepted.
To cope with this situation, Rune Christensen launched a governance vote on November 4, 2024 to determine whether to return to the MakerDao brand.The vote ended on November 8th and decided to support the brand to be reshaped and everything was performed as planned.Therefore, Sky will still be the core brand of Sky Ecology and Agreement. From MKR to Sky and from DAI to USDS, the transition will be carried out without further brand adjustment.Although the initial community response was different, the decision to reshape the brand to reshape the community shows that Sky is ready to enter a new stage with greater attention and a clearer direction.
2.2 The emergence of powerful competitors
Ethena launched in February 2024 increased the pressure of DAI market share, leading to the recent decline in MKR prices.Ethena is an Ethereum -based synthetic US dollar asset agreement, and its market value has reached $ 3 billion in just four months.As of November 5, 2023, Ethena’s USDE accounted for a 22.4%share of the decentralized stable currency market.This rapid growth is largely promoted by Ethena’s extremely attractive interest rate, and the interest rate is mainly maintained by three major sources of income.
l pledge rewards: Ethena uses the POS mechanism of Ethereum to earn interest through pledge coins like STETH.
l Market strategy: By adopting Delta neutral strategy, Ethena uses funds and base differences in perpetual futures and derivatives, that is, the short positions and short positions holding the spot assets and the sustainable futures.Monetalization.
l Stable currency interest rate: Ethena also invested in two main stable currency investment -one is to earn income from 295 million USDC through the COINBASE tax plan, and the interest of 400 million USDS is earned by borrowing costs.Essence
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As of the end of October, the yield of USDE was 13.3%, which was far higher than 6.5%of Sky SSR.Although the sustainability of such high rates and the overall stability of Ethena are still doubtful, the agreement is smooth.
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Fortunately, the competitive relationship between Ethena and Sky is surpassed, because there are several complementary noodles between each other.Ethena has achieved great success on the chain of its spot market price difference strategy, which should be mainly due to the high -yield ENA award plan.To support this demand, Sky has established a credit limit through Spark’s Morpho Vault.At present, a total of $ 400 million DAI has been assigned to the Vault with an annual income of 35 million US dollars. Sky benefits from the borrowing interest rate paid by Ethena users.
Even if Ethena’s reward plan shrinks, the demand for Sky loans may still be strong.Ethena’s protocol is mainly established around spot futures price difference strategy, which can maintain loan demand even if the inspiration is reduced.This will enable Sky to consolidate the status of its main credit provider and further accelerate the adoption of DAI.DSR/SSR has become the benchmark interest rate of various third -party protocols, which has enhanced the effectiveness of DAI and expanded Sky’s influence in the Defi ecology.As DAI shaped itself as an important back end of the service on the chain, SKY’s market share and usage rates are expected to further increase.
2.3 The Federal Reserve’s interest rate cuts on the potential impact of stable income
Finally, the recent interest rate cut for the Fed may be another factor that leads to the poor performance of MKR, although the connection between the two is relatively weak.On October 18, the Federal Reserve reduced the benchmark interest rate by 0.5 percentage points, down from 5.25%-5.5%to 4.75%-5.0%.Generally, interest rate cuts are favorable for risk assets such as cryptocurrencies. However, for Sky, which is operated by the DEFI borrowing agreement, this may have a adverse effect.This is because Sky’s main source of income is when the user borrows DAI or USDS, the stability fees charged through the CDPS (mortgage debt position).
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This stable fee accounts for a considerable part of SKY’s revenue, accounting for $ 309 million (98%) of its annualized revenue of $ 313 million.In order to cooperate with the Federal Reserve’s interest rate cuts, Sky may find it necessary to continue to reduce its stable fee.The benchmark interest rate in the DEFI field decreased from 5.44%in September to 4.76%, which also reacted this trend, which led Sky on September 26 to reduce SPARK’s loan interest rate from 7%to 6.5%, DSR (DAI savings interest rate) from6%dropped to 5.5%.At the same time, SSR (SKY savings interest rate) has increased by 0.25%, and it is possible that people will be willing to exchange DAI to USDS.
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With the decline in market interest rates, the cost of lending in the entire industry declines. If Sky does not adjust the charging accordingly, the borrower may steering interest rates with more competitive services, which will increase risks.This may directly affect SKY’s profitability, because the stability fee accounts for a large piece of its income.Therefore, the reduction of stability fees may damage Sky’s income and weaken SKY’s investment attractiveness.At present, most of the stability range of Sky’s borrowing pool is 4.5%-8%.
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3. Why do you say that Sky is ready to lead Defi revival?
3.1 Stable profitability and attractive valuation
SKY’s annualized revenue in the past 30 days is about $ 312 million, making it one of the top ten agreements in the entire blockchain and DAPP ecosystem.Under the Defi pattern of Ethereum, Sky is the third highest agreement second only to Uniswap and AAVE.It is worth noting that Sky’s net income from early 2024 to the present is about $ 125 million.After deducting $ 82 million in operating fees, the net profit is estimated to be $ 44 million.Given that most encrypted projects are difficult to achieve profitability, Sky’s amazing financial performance makes it rank in the best agreement in the industry.
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Since 2022, SKY’s income and net income indicators have maintained a steady growth, income has increased from US $ 76 million in 2022 to US $ 240 million in 2024, an increase of 213%in two years.44 million US dollars, an increase of 131%.More importantly, the data of these 2024 were only covered for 10 months, which means that the actual annual growth rate may be higher.In addition, a large part of net income is dedicated to the Burning mechanism of the MKR token and the Seal engine directly to token holders. This part of the content will be detailed below.
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As of November 6, Sky’s revenue increased by about 3.3 times, which was significantly lower than that of Uniswap, AAVE and Ethena.This valuation reflects the market’s uncertainty and prejudice that the market has discussed before, which creates a very attractive valuation opportunity.However, we believe that this underestimation is unlikely to continue, because the factors below are expected to promote the re -valuation of Sky to usher in the crypto market.
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3.2. Strong catalyst of short -term development momentum
As mentioned above, Endgame is Sky’s ambitious long -term roadmap, and the DAI distribution scale will expand to $ 100 billion.ENDGAME spans four stages, including brand and tokens to reshape, introduce Seal modules (toll switches), expand the SubDao ecosystem, launch independent L1 blockchain, and finally establish a completely decentralized autonomous governance system.Every stage has the following key measures.
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Although ENDGAME has the potential for changing for Sky, its long -term schedule makes the market restructuring immediately is challenging, especially in view of the first stage of more than two years to implement it.However, after the recent brand reshaping and the release of the main products, some of the current measures provided a strong short -term catalyst.
3.2.1 The income distribution mechanism is introduced through the seal module
The Seal module is the cost conversion module of Sky and MKR holders, similar to shareholders’ dividends.Participants can pledge SKY and MKR to earn USDS rewards and use pledge assets as mortgages to generate additional USDS.As Sky is about to launch the first Subdao and SPARK, the holder can also choose to receive SPK rewards instead of USDS rewards.
The Seal module distributes 25%of Sky net income to the holder and reserves 15%for the module for SPK distribution.This transforms MKR/SKY from a governance tokens that only have fuzzy utility to a revenue of directly sharing the income of the agreement.From early 2024 to the present, this may mean to issue approximately 10 million to 15 million US dollars to MKR holders.
The initial exit fee of the Seal module is 5%, an increase of 1%every 6 months, and 15%after 5 years.This structural inspirational early participants promised long -term investment at lower costs.
3.2.2 Convert the MKR to strict shrinkage currency
On October 31, Rune Christensen proposed to convert MKR to a shrinking token.If it is implemented, the MKR tokens will stop issuing, and the tokens will continue to burn and destroy through the smart combustion engine (SBE) launched in July 2023, and gradually reduce the total supply.Only when the liquidity shortage threatens the stability of DAI and USDS, it will be adjusted.This transformation to the shrinking mode is expected to create long -term scarcity and increase the value of MKR/SKY.
3.2.3 Expand to Solana Ecology
Sky plans to transport USDS and SKY to Solana through the Wormhole Bridge, and initially distributed up to 2 million SKY through LP incentives.This move allows the Solana -based DEFI protocol (such as Kamino Finance and Solend) to use the SSR integration plan (see Section 3.2.4), pioneered by AAVE, and may position the USDS as a leading stable currency in the Solana ecosystem.In addition, this move is expected to support the release of Skylink in the future.
3.2.4 Start Sky Aave Force flagship program
Sky will cooperate with AAVE to launch the “Sky Aave Force” flagship program.With this plan, Sky will launch a USDS market on AAVE to superimize Sky’s USDS savings interest rate (SSR) and AAVE’s market interest rates together.This integration has benefited from the reward mechanism of these two protocols. Once Spark is launched, AAVE and SPK airdrops will enhance incentives.The Sky Aave Force plan is expected to significantly improve the amount and liquidity of USDS, and may play a key role in the Defi ecosystem.
3.3 Forgetful moat
With years of mature experience, Sky has established a strong brand in the encryption industry and won the strong trust of investors and market participants.As Syncracy Capital co -founder Ryan Watkins said, DAI has the core indicators of currency premium as its network effect and value acquisition potential.This currency value is a crucial asset, and can only achieve through many years of continuous use and stable performance.
The protocol sustainability is not evaluated by theoretical design, but the performance of verifying the performance in the actual market.Over the past eight years, Sky has adopted various economic impacts and fluctuations, continuously showed toughness, and established credibility.DAI is still the longest -run decentralized stablecoin, creating a moat, and no other items can be easily fork or copied in the open source ecosystem.Thanks to this lasting stability, Sky has been leading in the field of decentralized stabilization currency for a long time. The total market value of DAI and Sky has now exceeded $ 5.6 billion.
SKY’s market leader has further strengthened with its extensive adoption and deep market penetration.DAI is not only the most widely listed decentralized stablecoin, but also has in -depth integration of countless DEFI protocols and DAPPs.Its lower capital costs have been supported by cautious risk management and currency functions across different use cases.Finally, Sky’s ability to generate actual demand without relying on the incentive plan highlights its sustainable competitive advantage.
4. Conclusion
Two years after the announcement of the Endgame strategy, Sky is getting out of the silence period with a new development momentum.Each major measures are showing results, and a series of short -term catalysts jointly promote growth.In view of these progress, reasons for Sky are convincing.With the pace of DEFI’s revival, Sky is ready to stand at the forefront.
