Sky’s token migration is entering its final stretch, with Balancer warning MKR holders that they have just days left to swap into SKY.
Summary
- Balancer set a Sept. 18 deadline for MKR holders to migrate to SKY, the new governance token of the Sky Ecosystem.
- Penalties of 1% SKY per MKR begin on Sept. 22 if governance approves, escalating quarterly to push timely migration.
- Exchanges and liquidity pools, including Binance and Balancer’s new reCLAMM pool, are aligning to support the transition.
Balancer has issued a final reminder to Sky’s (formerly MakerDAO) community. MKR holders have until Sept. 18 to migrate their tokens into SKY, the governance token of the rebranded Sky Ecosystem, or risk facing penalties.
In a detailed X thread, the decentralized exchange announced the update on Sept. 13, highlighting its role as a long-time provider of MKR liquidity. Balancer is now supporting the transition with a new V3 reCLAMM pool designed for Sky (SKY) liquidity.
With governance approval, penalties could be implemented as early as Sept. 22. Late migrations would result in a 1% SKY deduction, with the amount increasing every three months.
Why the SKY token migration matters
The switch from MKR to SKY is a key part of MakerDAO’s “Endgame” rebranding, which was launched in late 2024 and modernizes the protocol with new tokenomics, clearer governance, and improved accessibility.
SKY consolidates governance power into a single token while aligning with new mechanics such as staking rewards for USDS, the upgraded version of Dai (DAI).
To promote retail participation and enhance liquidity, the redenomination lowers the unit cost of governance tokens by setting a fixed 1:24,000 ratio. The penalty schedule is designed to hasten migration and strengthen adherence to the Sky ecosystem. It begins with a 1% deduction and compounds every three months up to 100% over 25 years.
The redenomination sets a fixed 1:24,000 ratio, lowering the unit cost of governance tokens to encourage retail participation and improve liquidity. The penalty schedule, starting with a 1% deduction and compounding every three months up to 100% over 25 years, is designed to accelerate migration and strengthen commitment to the Sky ecosystem.
Exchanges and protocols adapt
Exchanges have also begun enforcing the transition. Binance, Kraken, and Crypto.com have all suspended MKR trading and moved toward automatic conversions to SKY, with futures markets in MKR winding down ahead of potential SKY listings.
Balancer’s new SKY/WETH reCLAMM pool offers liquidity providers access to self-adjusting concentrated liquidity, a feature it describes as “next-generation pool tech” for Sky’s new governance model.
As of early September, roughly 61% of MKR had already been converted, leaving nearly 40% of the supply still to migrate. With the deadline days away, Balancer is urging liquidity providers and holders to act quickly to avoid penalties and to prepare for Sky’s next chapter