Aave Labs, a DeFi lending platform, has partnered with Sky (formerly MakerDAO), a stablecoin and lending protocol, to launch the Sky Aave Force initiative.

The initiative aims to boost DeFi adoption, bridge the gap between DeFi and traditional finance, and make both financial systems more accessible. Key proposals include integrating the newly launched USDS and sUSDS stablecoins on Aave’s V3 protocol, introducing an incentive program for sUSDS suppliers, and deploying a direct deposit module for USDS into the Aave Lido Market.

Additionally, the partnership will enable the companies to distribute SPK tokens, the native token of Sky’s lending protocol Spark, to create a market for sUSDS on Aave. Collectively, these initiatives will enable users to earn yields on their sUSDS deposits from the revenues generated by Sky’s protocol and mint USDS directly on Aave without meeting the usual collateral requirements.

Analyst QuickTake: This news comes just a week after MakerDAO rebranded under the new name Sky and announced the launch of new versions of its stablecoin and governance token, named the USDS and SKY. This initiative comes as the first of five phases in a major overhaul to the protocol (named Endgame) announced in May 2023 . The following phases include: 1) launching six Maker SubDAOs, 2) introducing new AI tools, 3) implementing rewards for governance participation, and 4) deploying a new blockchain.