Stablecoins have become the backbone of everyday crypto—letting traders dodge volatility, letting savers move value across borders in seconds, and giving DeFi users a way to earn yield without watching charts all day.
Sky Protocol takes that idea one giant step further with USDS: the next-generation version of DAI.
USDS keeps the familiar 1-to-1 dollar peg you know and love, but it layers on native yield and fresh reward mechanics that make parking your stablecoins a lot more interesting. If you’ve been hunting for a place to earn solid, on-chain interest without sacrificing control of your funds, USDS staking is worth a close look.
Think of USDS as “DAI 2.0.” Just like DAI, it has decentralized governance and is crypto-collateralized, so you never rely on a bank or a single company to hold reserves or earn rewards. But USDS does more than simply hold its peg:
If you’re holding idle DAI, then upgrading to USDS unlocks better yields and fresh token incentives without giving up the decentralization you trust or taking on new smart contract risk. Pair that with full transparency and self-custody, and Sky Protocol’s take on stablecoin staking looks tough to beat. Connect your wallet, upgrade a little DAI, and watch your USDS balance (and SKY stash) start to grow.
That combo of decentralization, passive yield, and seamless opt-in upgrades makes USDS one of the most compelling stablecoins in DeFi right now.
Staking offers a powerful way to earn yields in crypto. You’re essentially paid for liquidity provision (providing assets to a liquidity pool). So how does the staking process work with USDS?
The beauty of Sky is that you don’t need a maze of complicated yield farms to put USDS to work; everything starts with two core modules:
Because both streams run simultaneously, a single USDS deposit can earn double rewards without extra clicks. You can get started staking USDS by upgrading your DAI to USDS stablecoins here. We’ll also go into more detail on how to stake below.
Mechanism | Current APY* | Payout Token |
Sky Savings Rate (SSR) | 4.50% | USDS |
Sky Token Rewards | 5.74% | SKY |
*Rates captured at publishing time (May 2025). They can change through on-chain governance.
These percentages may not look like the triple-digit yields you see splashed across Twitter, but they’re transparent, fully collateralized, and paid in real time—no impermanent loss, no hidden lockups, no centralized risk.
Why choose USDS over sticking with the classic DAI Savings Rate or a centralized exchange?
Put simply, USDS hits the sweet spot between DAI’s decentralization and the passive income people chase on centralized lending desks, minus the custodial headaches.
If you’re exploring even more ways to diversify your stablecoin earnings, check out Origin Dollar (OUSD). OUSD automatically earns yield by deploying stablecoins—including USDS from Sky Protocol—along with other top assets across DeFi, all while keeping your funds liquid and secure. It’s been growing in Ethereum wallets since 2020, with no staking, no lock-ups, and auto-compounding rewards delivered straight to your wallet. Click here to check it out.
Ready to try it? Here’s the two-minute tutorial:
That’s it. No yield-stacking gymnastics, no hopping between protocols, and no surprise lockups. To start actively participating in a platform that offers higher yield than many stables, simply supply USDS to the Sky Savings Rate, enter the amount you want to deposit, and watch your balance grow. This system helps validate transactions on the network while allowing you to earn rewards.
Remember, if you want an even easier way to earn passive yield on USDS, you can consider Origin Dollar (OUSD). OUSD automatically deploys assets like USDS from Sky Protocol to generate yield, all while keeping your funds liquid and in your control. Just hold OUSD in your wallet—there’s no staking, no lock-ups, and yield auto-compounds directly to your balance.
