Decentralized finance (DeFi) lending platform Sky has proposed to finalize its upgrade from Maker by replacing the MKR governance token with the Sky (SKY) token. If accepted by the DAO, this transition is scheduled between May 15 and May 19, with the downgrade option from SKY to MKR disabled. Co-founder Rune Christensen views this as a significant milestone that could enhance liquidity by facilitating exchanges' adoption of SKY. Starting September 18, a delayed upgrade penalty will apply for MKR holders, increasing every three months and reducing their SKY tokens. Christensen emphasized enabling SKY staking would be crucial for the protocol's transition, aiming for a shift to zero fixed costs by the end of 2025. During this transition, liquidations of SKY will be paused to mitigate price manipulation risks until market liquidity is restored.

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