The maker has lost nearly half its value since rebranding its eponymous protocol to Sky. Founder Rune Christensen says he underestimated the importance of centralized exchanges.
Sky founder Rune Christensen said he made a “typical Defy mistake” in August when he pushed a rebrand that saw the storied stablecoin issuer drop the Maker name.
Alternating between defiance and introspection during a live forum at X on Tuesday, Christensen said centralized exchanges like Coinbase and Binance will list Sky’s new governance token.
“That didn’t happen,” he said. “I totally underestimated how important centralized exchanges are these days.”
A comprehensive, user-friendly brand, introducing new tokens and new ways to earn returns is due for an overhaul in the mainstream of decentralized finance.
Its new USDS stablecoin is already one of the largest, with a market cap of more than $1.1 billion, while its governance tokens have lost nearly half their combined value.
In a stunning interview, Christensen on Monday proposed ditching the Sky brand and returning to Maker. On Tuesday, he went live Forum To celebrate what the effort achieved in X and to reflect on where it went wrong.
Why the sky?
Maker is confused, Christensen has argued, since the 2022 overhaul was first proposed. Control of the protocol belongs to the people who own its governance token, the maker. But its purpose is to create a dollar-pegged stablecoin, DAI.
While both are well-known to crypto die-hards, the general public may not be familiar with the governance token and stablecoin, he said. What some may not know is that DAI is a stablecoin designed to always have a value of $1 – after all, most have “USD” in their name.
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While DAI has long been the largest decentralized stablecoin — an alternative to those that are frozen or can be seized by issuers — its supply has stagnated at around $5 billion amid intense competition from centralized incumbents run by Tether and Circle, as well as newcomers. Athena and PayPal.
The rebrand is part of a much larger overhaul known as Endgame. Along with the DeFi mainstream, the endgame is intended to increase participation in MakerDAO, the collaboration that runs the Maker Protocol.
Contentious negotiations, a developer exodus and some two years of work at a cost of about $5 million, according to one estimateThe maker announced in August that it had become Sky. Holders of Maker and DAI can convert those tokens into Sky and USDS tokens respectively.
There are other changes, and Christensen says they aren’t going anywhere.
“Sky Launch is not a rebrand, it’s a massive set of features,” he said wrote that X Wednesday.
Results
The results are mixed.
While USDS’s market cap is over $1.1 billion, Sky’s is under $60 million, a poor start for a token designed for mass appeal.
Maker, meanwhile, has taken a huge hit, dropping nearly 50% to $1,200 since the rebrand was unveiled.
Christensen said the rapid growth of USDS is “significant” because it doesn’t “cannibalize DAI demand”.
“It’s actually net new demand, resulting in total inflows into the system of six to $700 million,” he said.
“A lot of people are going to enjoy dunking on me,” he said of his face. “But ultimately, … the purpose of the rebrand is to tap new consumers and create net new demand. And it was clearly successful. “
But the SKY token bomb exploded.
“If you do a redenomination and have a cool ticker and all that, it attracts a whole new group of potential users,” says Christensen. “And apparently that didn’t work at all.”
Meanwhile, users are confused by the protocol, which now has four different tokens – Maker, Sky, DAI and USDS – with overlapping functions.
A ‘complete classic’?
Christensen said he will create a poll asking people to choose between two potential solutions by the end of the week.
The first is a return to the maker brand that will have “very, very light touch” changes, such as “enhancing the font and making some changes to the coloring.”
The second is to “go full classic” and scrap the rebrand altogether.
“What’s really changing is that it’s going from Sky – powered by the maker in the past,” he wrote on Wednesday, “to Sky – powered by the maker.”
As for Sky, it could “become a spin-off front end that just kind of lives on its own,” or a so-called subDAO like Sky’s in-house lending protocol Spark.
Vance Spencer, co-founder of crypto venture capital firm Framework Ventures, also spoke on Tuesday. The framework is “one of Maker’s big holders,” he said.
“USDS has been a tremendous success story, and it will continue to grow,” Spencer said.
“We confused people. [The rebrand] Definitely worth a shot on goal. I think it’s smart to refocus around the maker brand.
Alexander Gilbert is a DeFi Correspondent News. Got a tip? Email at [email protected].
