Sky token jumps 10% after governance vote causes bullish tilt in market dynamics

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Sky token jumps 10% after governance vote causes bullish tilt in market dynamics The protocol has repurchased about 1.83 Billion SKY tokens with USDS while a March 2 governance proposal reduced staking emissions and expanded credit infrastructure around its USDS stablecoin. By Sam Reynolds | Edited by Omkar Godbole Mar 5, 2026, 5:04 a.m. Make us preferred on Google What to know : Sky’s SKY token rose nearly 10 percent after a governance proposal cut staking emissions, expanded USDS credit infrastructure and coincided with an ongoing token buyback program. The new plan reduces SKY staking rewards to about 838.18 million tokens over 180 days, while buybacks funded with USDS have already spent roughly $114.5 million to remove about 1.83 billion tokens from circulation. With about 67 percent of SKY now staked and new “Launch Agents” onboarded to grow USDS credit markets, Sky’s changes reflect a broader DeFi shift toward lower emissions and revenue-funded token buybacks to limit dilution. SKY, the native token of DeFi platform Sky (formerly Maker), climbed nearly 10% after the protocol executed a governance proposal that slowed how quickly new tokens are created through staking rewards, expanded its lending system around the USDS stablecoin, and kept up a large buyback program that is pulling tokens out of the market. The governance proposal, which passed Feb. 27 and was executed March 2, introduced several changes across the Sky Protocol, including adjustments to staking rewards and the onboarding of new credit infrastructure designed to expand the reach of its USDS stablecoin ecosystem. One of the most closely watched changes involved staking rewards – the rate at which new coins are issued as a return for locking up existing holdings in the protocol. Slower supply growth The proposal “normalized” the so-called SKY staking emissions by setting the distribution at roughly 838.18 million tokens over the next 180 days, representing a reduction of about 161.82 million tokens compared with the previous schedule. Lower emissions can reduce dilution pressure, a factor traders often watch closely when evaluating governance tokens. At the same time, the protocol has been steadily repurchasing its own token through an automated buyback program funded with USDS. According to Sky’s dashboard, the system has spent roughly $114.5 Million buying back about 1.83 billion SKY tokens so far. The purchases occur in small transactions throughout the day, typically around $10,000 per trade, creating a steady bid in the market. In total, the program is currently removing roughly 3.6 million SKY tokens from circulation each day. Combined with the emissions adjustment, the buybacks have tightened the token's effective supply. Data from the protocol indicates that roughly 67% of SKY is currently staked, leaving a smaller portion actively trading in the market. The governance proposal also approved new infrastructure to expand credit markets around the protocol. Two new “Launch Agents” were onboarded to help deploy credit and manage liquidity infrastructure connected to the USDS stablecoin system. Industry trend Across the crypto market, a growing number of protocols are shifting toward token models built around buybacks and lower emissions, replacing the inflation-heavy incentive systems that dominated early DeFi. In the past, many protocols distributed large amounts of newly minted tokens to attract liquidity providers, traders, and governance participants. While those incentives helped bootstrap networks, they also created persistent selling pressure as recipients often sold rewards into the market. More recently, protocols have begun moving in the opposite direction. Rather than issuing more tokens, some are using protocol revenue to repurchase tokens on the open market or reduce emissions altogether. Hyperliquid offers a recent example. The decentralized exchange allocates a portion of trading fees to buy and burn its HYPE token . When trading activity surged last week, the protocol generated more than $13 Million in weekly fees, allowing roughly $9 Million worth of tokens to be burned over seven days. Other projects are pursuing similar approaches. Solana-based Jupiter voted in February to eliminate net new emissions for its JUP token in 2026, preventing additional supply from entering circulation. Meanwhile, derivatives protocol dYdX approved a plan allocating 75% of protocol revenue toward token buybacks. The shift reflects a broader effort to tie token demand more directly to protocol activity while limiting dilution for existing holders. MakerDAO sky More For You Pudgy Penguins: Challenging the Pokemon and Disney Legacy in the Global IP Race By CoinDesk Research Feb 27, 2026 Commissioned by Pudgy Penguins CoinDesk Research looks into how Pudgy Penguins disrupts traditional toys market via a phygital model. With 2M+ units sold, they scale via global partnerships and events. What to know : Disrupting a Stagnant Market : Pudgy Penguins is utilizing a "Negative CAC" model to challenge the traditional $31.7B licensed toy industry by treating physical merchandise as a profitable user acquisition tool rather than just a final product. View Full Report More For You Crypto bulls slam Ray Dalio's 'tired narratives' in defense of bitcoin's future By Krisztian Sandor | Edited by Aoyon Ashraf 6 hours ago Experts push back on billionaire hedge fund manager Ray Dalio's warning of bitcoin lacking gold’s qualities and risks from surveillance, quantum computing and lack of central bank buying. What to know : Ray Dalio, founder of Bridgewater Associates, said in a recent podcast that bitcoin lacks gold’s qualities, citing transparency, lack of central bank backing and quantum computing risks. Bitwise CIO Matt Hougan said those risks are exactly why bitcoin is only 4% the size of gold’s market, and long-term investors are betting that those will be solved in time. Galaxy’s Alex Thorn and VanEck’s Matthew Sigel countered Dalio's critique, saying that bitcoin’s adoption and utility continue to grow while quantum risks are being addressed. Read full story Latest Crypto News Eric Trump, World Liberty co-founder, calls banks 'anti-American' over stablecoin fight 5 hours ago Crypto bulls slam Ray Dalio's 'tired narratives' in defense of bitcoin's future 6 hours ago How this week's rout in Korean stocks might have triggered crypto's surge higher 7 hours ago Crypto's new run 'has legs' says analyst citing Trump's press on policy, institutional adoption 8 hours ago Ethereum Foundation wants the network to be the trust layer for AI 11 hours ago CEO of crypto investment firm Keyrock says bitcoin is undervalued, entering ‘transition year’ 11 hours ago Top Stories Bitcoin just cleared $73,000, but skeptical traders are already bracing for a 'bull trap' 12 hours ago Crypto campaign PAC Fairshake marks first wins in 2026 U.S. congressional primaries 12 hours ago Bitcoin 'air pocket' above $72,000 could mean quick run to $80,000 14 hours ago Institutional investors may be buying the dip as traders pour $1.7 billion into spot bitcoin ETFs 12 hours ago Billions in crypto are moving in Iran. Analysts can't agree if it's war-time panic or business as usual. 12 hours ago Morgan Stanley taps Coinbase and BNY for custody in proposed Bitcoin ETF 17 hours ago