USDS (USDS)USD

USDS is a decentralized, overcollateralized, dollar-pegged stablecoin built for decentralized finance, functioning as a stable medium of exchange, collateral, and savings instrument. It replaced DAI within the Sky Protocol ecosystem, which grew out of MakerDAO, originally founded by Rune Christensen and others between 2015 and 2017. USDS was introduced as part of the Sky rebrand and upgrade process completed in 2024 and 2025. The token is an ERC-20 asset that launched first on Ethereum and later expanded to other chains, including Solana. Rather than holding fiat reserves, Sky Protocol issues USDS through overcollateralized vaults where users lock assets such as ETH, USDC, or tokenized real-world assets in smart contracts. Stability is maintained algorithmically by the protocol. USDS is used for borrowing within Sky Protocol, earning yield through products like the Sky Savings Rate and its wrapped form sUSDS, trading, and payments. Governance over the system is handled separately by SKY token holders. Supply is uncapped and demand-driven, expanding or contracting as users open or close collateralized positions. This makes USDS one of the larger crypto-backed stablecoins operating without direct fiat backing.