Decentralized finance (DeFi) protocols Aave and Sky (formerly known as Maker) are exploring a partnership to bridge the gap between DeFi and traditional finance (TradFi).
Partnership Proposal
The proposed partnership, referred to as Sky Aave Force, follows a Sept. 2 governance proposal by Phoenix Labs, a DeFi research and development organization. The proposal suggests issuing SPK tokens to establish a market for USDS, a stablecoin launched after Maker’s August rebranding to Sky.
Initiative Details
Phoenix Labs proposes distributing up to 3.33 million SPK tokens per month to incentivize an Aave v3 market for Sky’s sUSDS, a yield-bearing token representing deposits in the Sky Savings Rate (SSR) program. The proposal also suggests introducing a USDS Direct Deposit Module (D3M) to Aave’s Lido Market with an initial debt ceiling of $100 million. This would allow Sky to mint USDS directly into Aave’s market without usual collateral requirements.
Future of Partnership
Phoenix Labs views this partnership as the first step to a deeper relationship with Aave, promoting both protocols as cores of decentralized finance. Aave Labs sees Sky Aave Force as an ambitious initiative aiming to drive mass adoption and close the gap between DeFi and traditional finance.
The partnership between Aave and Sky has the potential to significantly impact the DeFi landscape, foster integration with traditional finance, and broaden user opportunities within these systems.
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