USDS

A September 9, 2024 governance proposal called USDS the upgraded DAI and bundled it with sUSDS, SKY and new converters. The September 13 executive named the contracts and made execution eligible from September 17. The result was coexistence: DAI stayed live, while USDS became Sky’s new user-facing stablecoin.

The canonical USDS proxy is 0xdC035D45d973E3EC169d2276DDab16f1e407384F. The permissionless DaiUsds contract converts either token into the other at 1:1 by passing through their join adapters. This route does not prove that the contracts, savings products or administrative surfaces are identical.

USDS is made to be held, sent and used as a dollar-targeting token. It does not accrue the Sky Savings Rate by itself. To enter savings, a user supplies USDS to the separate sUSDS vault and receives ERC-4626 shares whose redemption value changes relative to the base asset under the module’s accounting and governance-set rate.

That share boundary prevents a common marketing shortcut. sUSDS and sDAI accumulated under different rates and launch dates, so their face values are not 1:1. A quoted savings rate also grants no claim on a particular Sky Agent, Treasury bill or collateral vault.

For DAI, the protocol documents an unrestricted 1:1 converter. For USDC, USDS uses a LitePSM wrapper that shares the older DAI-USDC pool. Its public functions can swap in either direction, but each trade is limited by the balances available in the contracts.

Governance sets the LitePSM input and output fees and can halt either direction. Those valves help manage the peg and stablecoin exposure. They also mean that ‘redeemable’ should be read as access to specified protocol routes, not as an unconditional legal promise from Skybase International to pay cash.

Sky describes USDS collateral as a mixture of stablecoins, overcollateralized onchain positions, lending and real-world assets deployed through governed structures and Sky Agents. Diversification can reduce dependence on one asset while adding custody, bank, borrower, duration and legal risks.

Ordinary token ownership does not assign a slice of that portfolio. The holder can transfer USDS and use available conversion contracts; governance chooses ceilings, fees, collateral rules and allocation paths. The distinction is the difference between a protocol liability recorded as a token and legal title to the assets behind the system.

The current implementation exposes rely and deny for ward management, ward-gated minting and ward-gated UUPS upgrade authorization. Burning is performed by a holder or an approved spender. The contract contains no freeze, blacklist or pause function. A launch-era paper’s suggestion that governance might later add freezing therefore remains a roadmap possibility.

The possibility is material because the proxy is upgradeable. Direct calls on September 5, 2026 found the Pause Proxy and UsdsJoin authorized as wards, while the Pause contract itself was not. The spell path can approve governance changes; UsdsJoin handles normal accounting issuance. A holder’s safest question is not whether the token is simply ‘decentralized,’ but which exact route and implementation are live when a transaction is made.