Sky
The oldest continuously operating protocol in DeFi, and the one that kept its stablecoin working through March 2020 when auctions cleared at zero bids.
- Founded
- 2014
- Registered
- Decentralised
- Site
- sky.money
The short answer
It has survived more than anything else in DeFi. In March 2020 a collapsing market and a congested chain produced zero-bid liquidation auctions — collateral sold for nothing — and the stablecoin kept functioning through it. Twelve years of continuous operation is a record nothing else in our DeFi rating can match, and we score it 8 out of 10. What it scores 6 on is transparency, and the Maker-to-Sky rebrand with its parallel DAI and USDS tokens has not helped there.
Key facts
| Age | The oldest continuously operating protocol in DeFi, running since 2014as of 14 Jul 2026 |
|---|---|
| March 2020 | A collapsing market and a congested chain produced zero-bid liquidation auctions — collateral sold for nothing — and the stablecoin kept functioningas of 14 Jul 2026 |
| Record score | 8 out of 10as of 14 Jul 2026 |
| Scale | 8 out of 10as of 14 Jul 2026 |
| Transparency | 6 out of 10 — the weakest criterion, and the Sky rebrand with parallel DAI and USDS tokens has not helpedas of 14 Jul 2026 |
| Upgradeability | 6 out of 10 — governance can change collateral types and parametersas of 14 Jul 2026 |
The protocol that survived Black Thursday
On 12 March 2020 the market fell far enough and fast enough that Ethereum congested, and Maker’s liquidation auctions began clearing at zero bids. Collateral was taken for nothing, because the auction mechanism assumed bidders who could transact and there were none. Vault owners lost their collateral outright.
The protocol survived. The stablecoin kept its function through the worst conditions any DeFi system has faced, and the shortfall was closed by a recapitalisation. Twelve years later it is still running, which nothing else in our DeFi rating can say, and we score its record 8 out of 10.
What makes the episode worth studying rather than just recounting is the failure mode. Nothing was hacked. The code did what it was written to do, and what it was written to do assumed a functioning market on the other side. The lesson generalises to every liquidation-dependent design in the sector, including the lending protocols rated elsewhere on this site: the mechanism is only as good as the market it depends on, and the market is least available exactly when the mechanism is most needed.
Why transparency scores lowest
Transparency is its weakest criterion at 6 out of 10, which is unusual for a protocol this old and this examined. The reason is complexity that has accumulated rather than anything hidden.
The rebrand from Maker to Sky, with DAI and USDS existing in parallel, means a user can hold two tokens from one system without a clear account of which they should hold or why. Layer on collateral types that now include real-world assets held through legal structures, and the question of what actually backs the stablecoin becomes one you need to follow governance to answer.
None of that is concealment, and it is the practical opposite of legibility. Compare Aave, which scores 9 because its risk parameters come from published methodology you can read in advance. Here you can find the information; assembling it into a picture of what backs your token takes work most holders will not do.
Upgradeability scores 6 for the related reason that governance can add collateral types and change parameters. For a stablecoin that is necessary — the alternative is a system that cannot respond — and it means the thing backing your token is subject to votes you are not following.
Incident record
| Date | Type | Amount | Were users made whole? |
|---|---|---|---|
| 12 Mar 2020 | Incident | — | Partially, through a recapitalisation. Market collapse plus chain congestion produced liquidation auctions that cleared at zero bids, so collateral was taken for nothing and vault owners lost it. The protocol itself survived and the stablecoin held — the reason its record still scores 8 out of 10.source |
In our ratings
Compared with
Our coverage of Sky
- How to spot a fake proof of reserves27 Sept 2026
- Bitget loses $351.6m — and the fund it says covers it is one we could not verify25 Sept 2026
- Is Kraken safe? The evidence, and what it lacks25 Sept 2026
- What happens to your coins if an exchange goes bankrupt23 Sept 2026
- Is Coinbase safe? What its own filings say19 Sept 2026
- How to move crypto off an exchange, step by step17 Sept 2026
- Token approvals: the permission that drains wallets15 Sept 2026
- What "not your keys, not your coins" leaves out9 Sept 2026
- The seed phrase mistakes that cost people everything7 Sept 2026
- Hardware wallet or software wallet: how to decide5 Sept 2026
Questions people ask
What happened to Maker on Black Thursday?
On 12 March 2020 market collapse plus Ethereum congestion caused liquidation auctions to clear at zero bids — collateral was taken for nothing and vault owners lost it. The protocol survived, the stablecoin held, and the shortfall was closed by recapitalisation.
What is the difference between Maker, Sky, DAI and USDS?
Sky is the rebranded MakerDAO, and DAI and USDS exist in parallel as its stablecoins. That coexistence without a clear account of which to hold is a large part of why transparency scores 6 out of 10, the protocol’s weakest criterion.
Is Sky safe?
Its record scores 8 out of 10 — twelve years of continuous operation, including through the worst conditions DeFi has faced. The open questions are what backs the stablecoin as collateral types have expanded into real-world assets, and how much of that requires following governance to know.
What does the 2020 failure teach about other protocols?
Nothing was hacked — the code did what it was written to do, and what it was written to do assumed a functioning market of bidders. Every liquidation-dependent design shares that assumption, and the market is least available exactly when liquidation is most needed.
What changed
- 27 Sept 2026 — Profile published.