The Daily: Sky mulls MakerDAO comeback, what's next for crypto's 'killer use case' and more

Happy Tuesday! In today's newsletter, Sky mulls a return to the MakerDAO brand, analysts outline what's next for crypto's "killer use case," DAO treasury management provider Karpatkey raises $7 million and more.

Let's get started.

Sky mulls return to MakerDAO brand

Less than two months after rebranding to Sky, the stablecoin-focused DeFi protocol's founder, Rune Christensen, proposed three options for further brand changes , including returning to the MakerDAO identity.

• The rebrand allowed DAI stablecoin holders to upgrade to Sky Dollar (USDS) at a 1:1 ratio and MKR holders to convert to SKY tokens at a 1:24,000 ratio.
• USDS reached a total supply of 1 billion just two weeks after its debut and has been integrated into major DeFi protocols like Aave, Ethena and Morpho.
• However, community feedback indicated some confusion, with reservations surrounding the utility of the SKY token and the new reward systems introduced with the rebrand.
• Christensen acknowledged a strong community affinity for the Maker brand, suggesting it might be beneficial to recenter it while maintaining separate roles for Maker and Sky.
• The three options on the table are: continue building with Sky as the core brand, reintroduce Maker as the central identity in its original form or recenter Maker as the central brand but make small changes for better alignment with USDS and subDAOs known as Stars.
• Sky plans to hold a community call on Friday to discuss the options and gather further input from participants.
  A formal vote on the brand direction will begin on Oct. 28, which, if approved, will trigger a multiple-choice poll for the community starting the week of Nov. 4.

What's next for crypto's 'killer use case?'

With stablecoins now a $177 billion market, they have arguably become the most dominant application of crypto technology — but what’s next for the industry's "killer use case?"

• Stablecoins have undoubtedly found product market fit, generating more than $5.1 trillion worth of global transactions in the first half of this year, according to analysts at crypto asset manager Bitwise — comparable to Visa's $6.5 trillion over the same period.
• They are also gaining traction, with major corporations like PayPal launching their own, discussions about them at the highest levels of government — and, most recently, payment giant Stripe acquiring the stablecoin API firm Bridge for $1.1 billion .
• The Stripe deal alone validates the usage and growth of stablecoins as a legitimate use case for public blockchains, according to analysts at research and brokerage firm Bernstein.
• Meanwhile, Bitwise expects to see more banks and payment processors entering the space, providing further investment opportunities in public companies exposed to stablecoins' growth potential.
• If issuers shared profits from their treasury reserves as interest, they could also rival money market funds — a $6.3 trillion industry — the Bitwise analysts added.
• Finally, as most activity occurs on Ethereum, stablecoins can also help drive the network's growth, indirectly boosting the price of ether as a another investment opportunity, they said.

Karpatkey closes $7 million funding round

Karpatkey has closed a $7 million funding round to expand its onchain treasury management services for DAOs and extend its reach to traditional financial institutions.

• Participants include AppWorks Ventures, Wintermute Ventures and prominent angel investors like Joe Lubin from ConsenSys, Stani Kuchelov from Avara and Fernando Martinelli from Balancer Labs.
• Originally launched within GnosisDAO in 2021, Karpatkey became an independent entity earlier this year and now manages over $1.8 billion in assets, executing more than 10,000 onchain transactions without incident.
• Karpatkey has worked with major crypto projects like Aave, Uniswap, ENS and MakerDAO, offering services beyond traditional asset management, including risk management and legal consulting.

Nomura-backed Komainu to acquire crypto custodian Propine

Komainu, the crypto custody firm backed by Nomura, is set to acquire Singapore-based crypto custodian Propine , subject to approval from the Monetary Authority of Singapore (MAS).

• The acquisition aims to strengthen Komainu's presence in Singapore, enhancing its security and regulatory compliance for custody solutions.
• Komainu did not disclose the value of the deal but said it plans to apply for a major payment institution license following the acquisition, which would allow the firm to offer full payment services.
• Propine, which holds a capital markets services license issued by the MAS, provides custody services for institutional clients with "digital currency connectivity."

Across proposes capping token supply after LayerZero founder flags contract concerns

Decentralized cross-chain bridge Across Protocol proposed capping its ACX supply at one billion tokens following criticism from the founder of interoperability platform LayerZero, Bryan Pellegrino.

• Earlier, Pellegrino had flagged a function in the Across token contract that he claimed allowed the owner to burn ACX tokens from any wallet and infinitely mint tokens.
• Despite initially dismissing the concerns as "disingenuous FUD and fear-mongering," Across Protocol co-founder Hart Lambur later acknowledged the "design choice was wrong," and said he put forward the proposal in the "spirit of decentralization and transparency."

In the next 24 hours

• U.S. mortgage data are released at 7 a.m. ET on Wednesday.
• U.S. FOMC members Michelle Bowman and Thomas Barkin will speak at 9 a.m. and 12 p.m., respectively. ECB President Christine Lagarde will speak at 10 a.m. Bank of England Governor Andrew Bailey follows at 4:30 p.m.
• Cosmoverse 2024 and DC Fintech Week continue as Blockchain Life concludes.

Never miss a beat with  The Block's daily digest  of the most influential events happening across the digital asset ecosystem.