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- Sky, a decentralized finance (DeFi) lending and borrowing protocol formerly known as Maker, has officially launched its USDS stablecoin on the Solana blockchain.
- The implementation of USDS on Solana is made possible through Wormhole’s Native Token Transfer, which allows the stablecoin to operate as a natively multichain asset, available on both Solana and Ethereum.
Sky, the decentralized finance (DeFi) lending protocol formerly known as MakerDAO, has launched its USDS stablecoin on the Solana blockchain. In a post on X dated November 19, Sky announced that USDS is “the first major DeFi-native stablecoin on Solana,” facilitating new methods for lending, borrowing, and trading across the leading DeFi platforms on the blockchain.
Why Stablecoins Are Turning to Solana
The significant consumer adoption of Solana and its vibrant community align seamlessly with Sky’s vision of making DeFi accessible to a broader audience. This expansion into Solana was made possible through Wormhole, a cross-chain protocol that facilitates transactions between compatible blockchains. Solana is quickly evolving into a major player in the cryptocurrency landscape, particularly within the DeFi realm.
It currently has $8.2 billion locked in its DeFi applications, making it the second-largest blockchain by total value, trailing only Ethereum. One of Solana’s standout features is its remarkable throughput. This speed advantage enables Solana to provide lower transaction fees and enhanced scalability. This capacity is particularly beneficial for stablecoin transactions, where speed and efficiency are crucial.
In addition to this, the USDS stablecoin is not the sole one moving to Solana, earlier this year, PayPal’s PYUSD also took that step. Stablecoin issuers are turning to Solana, citing the blockchain’s rapid processing speed, low transaction fees, and potential for supporting large-scale adoption as key factors driving their choices.
Looking ahead, Sky indicated plans to introduce its SkyLink cross-chain bridge for both USDS and sUSDS, its savings variant of the stablecoin, pending governance approval. The Sky protocol underwent its rebranding from Maker in August 2024, but the changes caused some confusion, prompting Rune Christensen co-founder of Sky, to suggest reverting to the original name. However, this proposal was met with resistance from major investors, so the name Sky remained.
To encourage Solana users to adopt the rebranded token, Sky is offering rewards to early adopters and liquidity providers on various DeFi protocols. For instance, users of Kamino Finance can access weekly rewards of 200,000 USDS for liquidity providers of USDC/USDS, and an additional 100,000 USDS will be available for suppliers of the stablecoin.
Currently, USDS ranks as the third-largest stablecoin by market capitalization, valued at $5.3 billion, which accounts for a 2.8% share of a market primarily dominated by Tether (USDT), which holds 88% of the market. Solana is currently priced at $235.53, reflecting a 2.72% decrease for the day.
Additionally, SOL’s trading volume dipped by 13.56% over the past 24 hours, indicating decreased buying activity.
