Aave Labs collaborates with Sky Protocol to integrate USDS into Aave V3, enhancing DeFi and TradFi connections.
Sky Protocol's decentralized stablecoin, USDS, is ready to provide new ways for users to receive rewards without giving up control over their assets. Sky just tweeted that starting September 18, eligible users can upgrade DAI to USDS at a 1:1 ratio or swap supported cryptocurrencies into USDS.
This move will allow users to unlock Sky Token Rewards in the form of SKY tokens and obtain access to the Sky Savings Rate, resulting in a unique decentralized savings system that does not require external protocols. Sky enables users to save non-custodially while collecting rewards, without giving up control over their assets.
The launch of USDS seeks to deliver native rewards in two ways. First, Sky Token incentives enable users to provide USDS and get SKY tokens as incentives straight from the Sky Protocol. This functionality eliminates the need to interact with other DeFi products, providing a seamless and simple approach to earning incentives.
In the future, the protocol's administration may accept the incorporation of rewards from other DeFi or cryptocurrency initiatives, increasing USDS's utility for users.
Second, the Sky Savings Rate provides a way to increase USDS holdings using a system that has protected billions of dollars in value over time. This native savings mechanism is intended to assist users in expanding their funds in an efficient and secure manner within Sky Protocol's decentralized ecosystem.
However, it is crucial to remember that access to Sky Token Rewards via their official platform, Sky.money, is not available in all regions, including the United States, which limits participation for some users.
Beside that, Aave Labs has also made important progress toward mainstream adoption of decentralized finance (DeFi) through its work with Sky Protocol.
CNF recently revealed that Aave Labs proposed integrating USDS and sUSDS (Savings USDS) into Aave V3 via a proposal known as Sky Aave Force.
This integration is anticipated to increase the relationship between DeFi and traditional finance (TradFi) by providing users with additional incentives. The idea also involves the implementation of native token awards, which will encourage users to participate with the Aave platform.