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Maker (Sky)
Maker/Sky review: DeFi vault borrowing where stability fees and WBTC vault terms are governance-dependent.
Run your numbers
What happens if BTC drops.
The single most important question on a Bitcoin loan. With Maker (Sky), liquidation is algorithmic. Once your loan-to-value crosses the liquidation threshold below, the protocol can repay your debt and seize collateral without manual review.
Cure window: None — auction-based.
What Maker (Sky) publishes: Auction-based liquidation when collateralization drops below 150% (~67% LTV). Liquidation penalty was reduced to 0% in the Oct-4-2024 offboarding vote (WBTC legacy vaults). Stability fee is governance-set and variable.
The terms, translated.
With Maker (Sky), the “contract” is the smart-contract risk parameters and the loan terms. We've pulled the key terms from Maker (Sky)'s own data and translated them into plain English.
How Maker (Sky) compares to its closest cousins.
The org, the founder, the governance.
Maker/Sky WBTC vault claims are live-governance dependent. Current public docs verify the rate and liquidation mechanisms, but not a simple current consumer-facing WBTC APR table. The older fixed “~1.5-2.5% stability fee” claim has been removed from confident copy. Users must verify the exact collateral type, stability fee, liquidation ratio, penalty, and whether that WBTC vault remains available in the Sky/Maker app before borrowing.
The 8-factor breakdown.
Non-Custodial. Scores 9/10 (strong) on the custody axis. Non-custodial designs score highest because no third party can move collateral; custodial designs lose points proportional to operator discretion.
Policy: none. Scores 10/10 (strong). "Strict" / "no-rehypothecation" policies score highest because collateral cannot be lent out; "permitted" policies lose points for exposure to counterparty failure on the re-pledged BTC.
Scores 8/10 (solid). Programmatic on-chain liquidation at a fixed LTV scores highest (predictable, no operator discretion); discretionary or off-chain liquidation processes lose points proportional to opacity and timing risk.
Regulatory status: offshore. Scores 4/10 (weak). US/EU-regulated lenders with explicit licensing score highest; offshore or DAO-governed entities lose points because there's less recourse if something goes wrong.
Reserves reporting via On-chain (smart contract). Scores 9/10 (strong). Recurring third-party attestation scores highest; self-attested or unpublished reserves lose points.
Scores 10/10 (strong). Lenders that publish operating reports, smart-contract code, and live rate/LTV parameters score highest; those that bury terms in PDFs or change rates without notification lose points.
9+ years operating since 2017. Scores 10/10 (strong). Older operations with surviving stress events (March 2020, Nov 2022, etc.) score highest; younger or untested operations lose points proportional to how many full cycles they've operated through.
Scores 4/10 (weak). Loan agreements with explicit liquidation order, documented smart-contract risk, and clear borrower recourse score highest; ambiguous default terms lose points.
Same score, different shape.
Each spoke is one of the eight factors behind Maker (Sky)'s 8.2/10, plotted 0–10 and ordered by methodology weight. The filled shape is the lender's safety profile. Two lenders can share an overall score and still have opposite shapes — a balanced octagon is a very different risk than a spike on one axis with thin edges everywhere else. Maker (Sky) is strongest on rehypothecation (10/10) and thinnest on loss protection (4/10).
Questions readers actually ask about Maker (Sky).
Is Maker (Sky) safe for Bitcoin-backed loans?
Maker has a safety score of 8.2/10. It's one of the oldest DeFi protocols we track (since 2017) with zero hacks on its core contracts. It has a $10M bug bounty — among the largest in DeFi. Collateral is non-custodial via smart contract vaults. Main risks are WBTC custodial risk and a governance-set, variable stability fee (the WBTC liquidation penalty was reduced to 0% in the Oct-2024 offboarding vote).
What are Maker's Bitcoin loan rates?
Maker charges a "stability fee" on WBTC vaults, currently 9.0–16.0% APR. This is set by MKR/SKY token holder governance and is variable — it can change with each executive vote. There are no origination fees.
How does Maker liquidation work?
Maker uses auction-based liquidation when collateralization drops below 150% (~67% LTV). The WBTC liquidation penalty was reduced to 0% in the Oct-4-2024 offboarding vote (was 13%). The stability fee is governance-set and variable (currently a ~9–16% band).
What do I borrow with Maker?
You mint USDS (formerly DAI), a decentralized stablecoin pegged to USD. You then need to convert USDS to fiat via an exchange if you want USD in your bank account. This is an extra step compared to CeFi platforms that deposit USD directly.
Does Maker require KYC?
No. Maker vaults are permissionless. Anyone with an Ethereum wallet can open a WBTC vault and mint USDS without identity verification.
The receipts.
Every figure on Maker (Sky) traces to a primary document. These are the ones we read — open any of them.
Stability-fee mechanics and governance-set rates
Liquidation mechanics, penalties, and auction handling
WBTC collateral-type governance changes; WBTC vault parameters should be treated as live-governance dependent