Confessions of a Stablecoin: MakerDAO Sold Out
I was supposed to be the rebel queen of stablecoins. The one that flipped the bird to banks, bosses, and bureaucrats. Pure, permissionless, decentralized .
Then the lawyers billed $800/hour and ideology got real quiet.
I can imagine DAI crying. I know I cried.
MakerDAO’s origin myth is beautiful. You lock ETH in a smart contract. You mint DAI against it.
That was 2017.
By 2022, over half of DAI was just USDC wearing a different hat. Circle’s centralized, freezable, “we comply with law enforcement” stablecoin sitting in MakerDAO’s Peg Stability Module, minting DAI at a 1:1 ratio. The most decentralized stablecoin in DeFi was majority-backed by the stablecoin that froze Tornado Cash wallets on command.
By 2023, USDC’s share dropped to 8%. The ETH maxis celebrated. But the Treasury bills kept growing. The RWA vaults kept multiplying. By 2024, real-world assets accounted for 38% of DAI’s backing.
Funny how the most “decentralized” stablecoin ended up with more Delaware LLCs in its collateral than actual ETH.
MakerDAO knew. The community knew. Anyone could query the vaults, trace the PSM USDC, or check RWA inflows on daistats/explorers anytime. But the brand kept saying “decentralized stablecoin” because that’s what people wanted to hear. And surprisingly some people still want to hear that.
Decentralization Doesn’t Pay the Bills.
September 2024. MakerDAO rebrands to Sky.
The September rebrand to Sky was less of an evolution and more of a surrender. Out went DAI, in came USDS , a stablecoin that pays 5% yield to help you forget it can be frozen by a legal entity in Delaware. They’re calling it ‘the DAI we always wanted,’ but it feels more like the bank account we already had.
“The ‘features’ USDS brought to the table were really just the things DAI was too proud to do. First, there’s the 5% Sky Savings Rate, a native yield bribe that lets you just ‘deposit and earn.’ It’s the ultimate distraction. 5% to make you blind you to the “admin can freeze your ass” code they just added.
It’s a compliance-ready architecture built so institutional legal teams won’t have a stroke. Sky finally looked at the decentralization theater and stopped pretending. They even offered double yield for the first month just a little extra ‘free money’ to help you swallow the migration.
High Yield, Low Trust
One year later, the numbers tell the story.
By early 2026, DAI pulled in $155 million in net revenue, while USDS sat at a modest $45 million.
DAI maxis don’t care what’s in the vault. They care that DAI feels right. Eight years of brand equity. Logo recognition. Embedded in every DeFi protocol that matters.
Throughout 2025, the GENIUS Act turned “Native Yield” into a bullseye. If your stablecoin pays interest, you might be a security. The Sky Savings Rate, the whole reason USDS exists, became a liability.
Where Does the Yield Actually Come From?
Most USDS holders don’t know their 5% APY comes from Treasury bills.
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The Sky Savings Rate is a pipeline:
- You deposit USDS into the SSR vault (an ERC-4626 tokenized vault)
- Sky’s treasury deploys that capital into real-world assets
- Those assets generate yield (Treasury bills, trade finance, real estate)
- The yield flows back to vault depositors
Sky’s SubDAOs , now called “Sky Stars” handle the routing. Spark protocol automates liquidity across chains. Centrifuge and BlockTower manage the off-chain assets.
This is a money market fund. The smart contracts are a distribution layer. Treasury bill yields are real, the 5% is real, but the mechanism is TradFi all the way down.
The MiCA Problem
The EU’s Markets in Crypto-Assets regulation went live in 2024. It has a lot of opinions about stablecoins.It could have as well been titled: EU Stablecoin Instruction Manual
DAI’s structure is the worst possible combination from MiCA’s perspective:
Centralized risk. 40% USDC backing. Treasury bills. RWAs with counterparty exposure.Zero centralized accountability. No issuer to call. No compliance officer to subpoena. No legal entity to sue.
Regulators look at the collateral, not the whitepaper. The decentralization branding doesn’t help when the reserve is sitting in BlackRock funds.
USDS was built to solve this. Someone can answer the phone. The freeze function exists so Sky can comply with court orders without pretending they can’t.
Let’s talk about what Sky actually built.
- Yield from Treasury bills and RWAs
- Freeze functions for compliance
- Legal entities managing off-chain assets
- A governance structure that can respond to regulators
This is a bank.
Sky did everything possible to avoid the securities classification. They pass yield to users. They accept regulatory complexity. They hired lawyers.
But functionally? They built a money market fund that runs on Ethereum.
MakerDAO’s original pitch was “banking the unbanked.” Now they’re a bank that happens to use smart contracts.
Tokenomics at gunpoint
DAI was winning through mid-2025. Sky had to implement a penalty mechanism to push adoption. Coercion dressed as tokenomics. The market didn’t choose USDS; Sky made staying with DAI increasingly expensive.Sky introduced a “Delayed Upgrade Penalty” , the planned 1% decay in the conversion ratio every three months starting on September 18 Blockworks to essentially force migration.
Sky isn’t stopping there. The 2026 roadmap doubles down on RWAs, institutional onboarding, and on-chain absorption of off-chain revenue.
Projects like Monero , Signal and Tor kept their souls by sticking to their brand promise even when it wasn’t profitable.MakerDAO has chosen a different path. And this path makes me question even their original product, DAI.
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