What Is USDS (Sky Dollar) and Is USDS the Same as Dogecoin?
USDS, also called Sky Dollar, is a decentralized stablecoin that was created by the Sky Protocol, which is the rebranded and upgraded version of the MakerDAO project. The stablecoin is meant to maintain the same peg value as the dollar and is collateralized by crypto assets and real world assets that are on chain. One should differentiate USDS from Dogecoin because the former is an independent cryptocurrency and has a different value compared to USDS.
Key Takeaways
- USDS, also called Sky Dollar, is a dollar stablecoin offered by the Sky Protocol that represents the rebranded evolution of the MakerDAO protocol.
- USDS became the main stablecoin of Sky rather than DAI in 2024 and remains interchangeable with the latter in the amount of 1:1.
- According to Allium, as of early August 2026, the onchain circulating supply of USDS amounts to approximately 6.37 billion dollars.
- USDS is not Dogecoin. USDS is a stablecoin that maintains the peg to the dollar, whereas Dogecoin is an independent cryptocurrency with changing value.
- USDS is collateralized by a combination of onchain crypto collateral and real world assets with over 3 billion dollars worth of RWA collateral, including the stablecoin mortgage agreement for 500 million dollars that was signed in February 2026.
- USDS holders have the opportunity to earn yield via the Sky Savings Rate that gives USDS holders shares in the protocol revenue.
- SKY is a separate governance token of the Sky ecosystem that is the rebranded substitute for the previous MKR token that can be converted into the new one with the ratio of 1 MKR to 24,000 SKY.
Maybe you came across USDS while looking for some information about stablecoins and started wondering whether there is some link between stablecoins and Dogecoin. In this case, we will give you all the information about USDS, its features, and differentiate this cryptocurrency asset from Dogecoin for Canadians.
What Is USDS (Sky Dollar)?
The USDS coin, also referred to as Sky Dollar, is a decentralized stablecoin collateralized with US dollars which was created by the Sky Protocol team. The value of the USDS coin equals 1 US dollar at all times due to the presence of the collaterals, both on-chain crypto and off-chain assets.
In comparison with the stablecoins issued from the single bank account, the USDS stablecoin is also called crypto-backed native stablecoin. It means that unlike in case of other stablecoins, the USDS is issued on the basis of on-chain collaterals rather than banks. In this way, the whole process of issuing the USDS stablecoin becomes transparent.
The Story Behind USDS: From MakerDAO to Sky
First of all, in order to get acquainted with USDS stablecoin, let us take a look at its history. The USDS stablecoin is actually the new version of the DAI stablecoin, which was the first stablecoin of this kind in the crypto industry. The DAI coin was created in 2017 on the platform of MakerDAO decentralized finance protocol.
During the rebranding of the platform that took place in August 2024, the platform got the name of Sky Protocol. As a result of this rebranding process, two new tokens were introduced, replacing MKR tokens, thus becoming a dual-token system. These tokens include USDS stablecoin and SKY governance token. The idea behind this rebranding was the creation of a new eco-system that would exceed the protocol borders and offer scalable and community-oriented product.
It is important to note that the DAI stablecoin has not been withdrawn. In fact, you can still use DAI as a legacy coin, but you can easily exchange it 1:1 for DAI/USDS coins.
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Is USDS the Same as Dogecoin?
It is quite a common question among newcomers in the cryptocurrency community since both terms are encountered when researching. To answer the question stated above, USDS and Dogecoin do not have anything in common at all.
| Feature | USDS (Sky Dollar) | Dogecoin (DOGE) |
| Asset type | Stablecoin | Independent cryptocurrency |
| Price behavior | Designed to stay pegged near one US dollar | Price fluctuates based on market supply and demand |
| Primary purpose | Stable store of value and DeFi utility | Peer to peer digital currency and payments |
| Backing mechanism | Crypto collateral and real world assets | Not collateral backed, operates on its own blockchain |
| Governance | Managed through Sky Protocol governance | Maintained by an independent open source developer community |
The first thing to know about USDS is that it was created in such a way that it is resistant to the volatility inherent to the cryptocurrency market, which actually makes it a stablecoin. In turn, Dogecoin is just an ordinary cryptocurrency with a market-based price. As far as we can see, there is nothing common between these two currencies that could make them somehow connected other than being cryptocurrencies.
How Does USDS Work?
The protocol keeps the dollar peg using both the collateralized minting system and something known as Peg Stability Modules or PSMs. The latter allows the users to exchange USDS for other leading stablecoins in a direct and predictable way, which helps to keep the price of the token close to one dollar.
Collateral Backing
The protocol mints USDS against a portfolio of onchain crypto assets and real world assets. Such an overcollateralized structure implies that the amount of value backing the token exceeds the token’s face value. The data from the protocol shows that more than three billions of USDS have been backed by real world assets, including the $500 millions USDS backed stablecoin mortgage that was signed in February 2026.
Peg Stability Modules
PSM’s enable the trading of USDS with other stablecoins at a consistent ratio, making it possible to sustain price stability and give the token practical value throughout different areas of the DeFi sector.
Cross Chain Availability
The USDS is available on several blockchain ecosystems through a bridge known as SkyLink, apart from the primary blockchain of Ethereum. According to the Allium data of early August 2026, more than 98% of all USDS liquidity is on the Ethereum network, with a small percentage of this token being on Arbitrum, Solana, and Base networks.
Earning Yield With USDS: The Sky Savings Rate
Among the major aspects that distinguish the USDS coin from others is the Sky Savings Rate, also called SSR. The program would allocate a certain portion of the protocol’s income to the USDS coin holders who deposit their tokens in the savings module as a means of automatic yield generation for those who would like their stablecoin to generate income for them.
It is this distinctive aspect that helps the Sky Protocol USDS coin stand out from most other stablecoins in the market that require other yield generation strategies.
USDS and the SKY Governance Token
In contrast to USDS that represents the stablecoin forming the core of the Sky Protocol, SKY stands for the independent governance and utility token of the ecosystem. The SKY token was introduced as the successor of the previous MKR token and has the conversion rate 1 MKR = 24,000 SKY and forms an integral part of the governance system.
The owners of the SKY tokens have the opportunity to take part in the decision-making process using on-chain governance and influence the future of the Sky Protocol. The SKY token can also be used in reward systems such as Sky Token Rewards and Activation Rewards.
It is important to pay attention to the fact that the SKY and USDS coins have quite different functions – USDS was created for stability and use in DeFi applications while SKY is connected to the governance and incentives to join the ecosystem of the protocol.
What Can You Do With USDS?
Here comes the list of things that can be done with the help of USDS:
- Earn interest: By depositing USDS in the Sky Savings Rate module, one can earn the interest depending on the profitability of the protocol.
- Trading and liquidity: USDS can be used in numerous liquidity pools on various exchanges for trading purposes.
- Governance: By holding and using USDS, one will become a part of the Sky ecosystem and will have the ability to participate in SKY governance.
- Cross chain operations: Using SkyLink, it becomes possible to move the USDS between Arbitrum, Base, and Optimism and have cheaper transactions than by using Ethereum only.
- Onchain stable value storage: As it was mentioned above, the USDS has the constant dollar value and thus allows users to store the value onchain without any change in the price.
How to Acquire and Hold USDS
Those willing to purchase USDS can do so in several standard ways based on the preferences of a user regarding the crypto and platforms involved.
- Swap from DAI: If a user owns DAI, he or she can easily switch to USDS using the 1:1 rate exchange via Sky Protocol UI.
- Exchange through Peg Stability Modules: The USDS can be exchanged to another popular stablecoin, USDC or USDT, through Peg Stability Modules of the protocol.
- Purchase on exchange: USDS can be purchased on different crypto exchanges and liquidity pools where it is traded as another token in the portfolio of a user.
- Bridge between chains: Users who already own USDS on one of the supported blockchain networks can bridge it to another, e.g., Arbitrum, Base, using the SkyLink bridging solution to reduce transaction fees.
Once USDS is obtained, a user can keep it in any wallet supporting Ethereum or the blockchain network the coin originates from. USDS owners may keep tokens in software wallets for everyday use and hardware ones for storing long term.
Transparency and Onchain Verification
One of the distinctive features of USDS is that its backing and all operations performed within the system can be verified through blockchain analysis, not just via the periodical reports from the centralized organization. As Sky Protocol is governed in a decentralized way, most of USDS’ backing and protocol-level finances can be verified via onchain solutions.
This is absolutely different from the way fiat-backed stablecoins operate; in which the verification of reserve balances is based on quarterly reports generated by the issuer of the stablecoin. With USDS, the transparency is embedded into the design of the stablecoin itself, because the collateral ratios, minting volume and Peg Stability Module balance can all be viewed in real-time by anyone, who has access to the blockchain data. For that reason, USDS (as well as its predecessor DAI) has become one of the best-known examples of how transparency can be achieved in decentralized stablecoins.
USDS Smart Contract Security
Security becomes a crucial element in any protocol that holds hundreds of millions of dollars worth of collateral. USDS smart contracts inherited and enhanced the original MakerDAO code base (which has been operating for more than five years already), and have been audited thoroughly multiple times during the development of the system from DAI to USDS.
The integrity of the system is protected additionally by the governance, as the changes in the collateral assets, risk parameters or the system itself can only be made after community discussion and approval of SKY token holders.
Such two level system of security is the main reason for USDS and its predecessor becoming a long-lasting participant of the decentralized stablecoins niche.
When a user evaluates the available stablecoins, besides the collateral and yield data, the audit history and the governance process should not be ignored.
USDS Market Data Snapshot
In early August 2026, USDS became an important player in the DeFi sector. In terms of on-chain circulating supply, by Allium’s stablecoin dataset, USDS was estimated to be worth about 6.37 billion dollars and was distributed across four blockchains, mostly residing on the Ethereum blockchain.
Yet another impressive financial indicator was the gross protocol revenue of 123.79 million dollars for Q1 2026 that was generated by the Sky Protocol.
It should be mentioned that as these statistics are connected to the supply of the stablecoin and indicators related to the protocol, it is extremely important to use only the latest sources in order to obtain accurate data.
Learn more:
USDS (Sky Dollar) Price Prediction: What to Expect
How to Buy USDS and Is USDC Crypto a Good Buy?
How USDS Compares to Other Major Stablecoins
USDS can be regarded as a stablecoin, just like the popular USDC and USDT, although the former stablecoin has a very decentralized backing mechanism.
| Feature | USDS | Traditional Fiat Backed Stablecoins |
| Backing structure | Crypto collateral plus real world assets | Direct fiat currency reserves held by a custodian |
| Issuer type | Decentralized protocol (Sky) | Centralized company |
| Built in yield | Yes, through Sky Savings Rate | Typically not built in, varies by issuer |
| Governance | Community governed through SKY token holders | Managed internally by the issuing company |
Indeed, this decentralization has been one of the factors that made both USDS and its predecessor DAI popular among transparency-focused users.
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Why Canadian Users Are Exploring USDS
Interest in USDS on the part of the Canadian crypto community is formed together with growing interest in the sphere of decentralized finance and yield-bearing stablecoins. There are several factors that need to be considered by people who are planning to study USDS in Canada:
- The in-built yield opportunity provided by Sky Savings Rate, which eliminates the necessity of searching for other DeFi solutions for yield generation;
- Non-custodial solution, which means that the user owns the token without depositing it into the custody of the central custodian;
- Cross-chain capabilities via SkyLink can be beneficial for people using different blockchains;
- The protocol’s growing number of supported real-world assets is shown by asset-based lending partnerships of the protocol. It shows that the project’s ecosystem grows and matures.
The question arises regarding regulation of the ownership of stablecoin and yield in relation to Canadian taxes according to the existing rules concerning digital assets.
USDS Within the Broader DeFi Lending Landscape
USDS actively participates in lending and borrowing procedures in the sphere of decentralized finance. USDS serves as liquidity and collateral of the liquidity pool in these operations. The stablecoin is pegged to the dollar and does not have price volatility.
Still, the usefulness of USDS is not confined solely to the protocol itself. Liquidity pools of USDS can be found on numerous decentralized exchanges and lending platforms, which illustrates the vast adoption of the token within the sphere of DeFi after the launch of the token in 2024. This cross-platform usefulness becomes one of the ways to maintain the circulating on-chain supply of USDS, which is estimated to be worth around 6.37 billion dollars at the beginning of 2026.
For people who work in the sphere of decentralized lending platforms, a reliable and transparent stable coin such as USDS can become an additional instrument to manage their finances through on-chain operations.
The Evolution of Sky Protocol’s Ecosystem
Since the moment of rebranding from MakerDAO in August 2024, Sky Protocol keeps building upon its ecosystem beyond its initial two tokens – DAI and MKR. Due to the appearance of sub-ecosystems called Stars in the protocol, various specialized projects can be built on top of the protocol and at the same time connect to USDS as the common stable asset.
This kind of modular design shows the approach of the protocol to scaling up beyond the initial unified system in order to become more flexible and capable of handling different tasks like real-world assets lending or cross-chain liquidity.
Conclusion
One of the stablecoins that operates under decentralized means of operation is the USD Stablecoin popularly known as USDS or the Sky Dollar. The USDS is the USD stablecoin that operates in the Sky Protocol, which is a rebranding of the MakerDAO protocol. The name of this coin shows that it is supposed to maintain a steady value of one US dollar through a combination of onchain crypto and real world assets. Additionally, USDS also has built-in yield generation through its Sky Savings Rate.
While there might be some naming similarities, USDS has nothing in common with Dogecoin and is not to be considered the same cryptocurrency. USDS is used as a dollar-pegged token in the crypto world, whereas Dogecoin is just another independent cryptocurrency in the crypto world. With increasing number of assets backing USDS and its cross chain accessibility, USDS is an important part of the decentralized finance world in Canada where people can have stable and yield generating tokens.
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