Transparent oversight, decentralized control
Sky Protocol is governed entirely onchain by SKY token holders. This decentralized structure is designed to reduce single points of failure, ensuring that all protocol upgrades, risk parameters, and asset allocations are executed with transparency and the highest standard of accountability.
Stake SKY to activate voting power and earn
To participate in governance, holders must stake their SKY tokens. This onchain mechanic activates voting rights, empowering SKY holders to shape risk parameters and direct protocol upgrades, while simultaneously generating programmatic rewards from protocol profits.
Active governance
Staking unlocks the voting power required to approve rate adjustments, collateral types, adjust debt ceilings, and execute core system upgrades.
Strategic delegation
Transfer voting power to delegates. This ensures continuous protocol oversight without requiring daily operational management from all SKY stakers.
Programmatic rewards
Protocol profits are used for programmatic SKY buybacks, at rates dynamically set by governance, and distributed to active SKY stakers, aligning governance with economic returns.
Capital efficiency
Governance participants can borrow USDS directly against their staked SKY positions, ensuring capital remains highly optimized, subject to protocol-defined parameters.
Proposal to execution
Proposal creation
Any participant can architect a protocol change. Viable proposals require a clear scope, strict rationale, and a detailed system-impact analysis.
Forum discussion
Proposals undergo aggressive peer review in the governance forum. Risk assumptions are stress-tested and technical parameters are highly refined prior to a vote.
Onchain voting
SKY holders can vote directly or transfer the voting power of their SKY to a recognized delegate if they wish. The token-weighted outcome definitively dictates whether a protocol upgrade is approved or rejected.
Proposal execution
Once a proposal is approved, it is executed onchain and cannot be reversed directly; it can only be challenged by submitting and passing a new proposal.
Acquire, stake, govern
SKY is a publicly tradeable onchain asset available across global trading venues. While you can hold SKY anywhere, to participate in Sky Protocol governance and receive programmatic rewards requires active staking, a process that can be executed through the protocol’s primary application, Sky.money.
