Use Sky (formerly MakerDAO) to Mint USDS
How to mint USDS / DAI by opening a vault on Sky / MakerDAO: collateral types, stability fees, and liquidations.
What you'll need (prerequisites)
- Self-custodial wallet (MetaMask, Rabby, etc.)
- ETH or native gas token
- Tokens to mint USDS with
- Familiarity with transaction approvals
Recommended for this tutorial
Tools and accounts referenced in the steps below:
Step-by-step
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Step 1: Connect a self-custodial wallet
Open Sky / MakerDAO's official site (verify the URL — phishing fakes are common). Click "Connect Wallet" and choose your wallet (MetaMask, Rabby, WalletConnect, hardware). Approve the signature request — this does not move funds.
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Step 2: Select the correct network
Confirm your wallet is on the network Sky / MakerDAO expects (Ethereum mainnet, Arbitrum, Base, Polygon etc.). Wrong-network connections are the #1 source of UX confusion.
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Step 3: Acquire the input tokens
Most Sky / MakerDAO actions require both a token and ETH (or the chain's native token) for gas. Hold a small buffer (~$10-20) for transaction fees.
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Step 4: Approve token spend
For ERC-20 tokens, the first interaction requires an "approve" transaction granting Sky / MakerDAO permission to move that token. Approve the exact amount (not unlimited) when possible to limit downside if Sky / MakerDAO is ever exploited.
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Step 5: Execute the mint USDS transaction
Enter the amount, review the slippage tolerance (0.1-0.5% for stablecoins, 0.5-1% for blue chips, more for thin-liquidity tokens). Click confirm and approve in your wallet. Wait for on-chain confirmation.
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Step 6: Verify on-chain
Open the transaction on Etherscan / Arbiscan / Basescan. Confirm the balance change matches expectations. Save the transaction hash for tax records.
Common errors and fixes
- Transaction reverted. Most reverts are slippage exceeded, allowance not set, or insufficient gas. Increase slippage marginally and retry, or check Tenderly for the revert reason.
- Stuck pending transaction. Speed up with a higher gas price (replace-by-fee) or cancel by sending a 0-value tx to yourself with the same nonce and higher gas.
- Approved a malicious contract. Immediately revoke at revoke.cash. Move remaining tokens to a fresh wallet if you suspect ongoing compromise.
- Wrong network. Switch chains in your wallet. If funds were sent cross-chain to a contract that doesn't exist on the destination, contact the bridge support.
- Slippage too high. For thin-liquidity tokens, split the swap into smaller chunks or route via an aggregator (1inch, CoW Swap, Matcha) which finds better paths.
FAQ
Is Sky / MakerDAO safe?
Sky / MakerDAO is one of the most widely used and audited protocols in DeFi. As with any smart-contract platform, residual risk includes: smart-contract bugs, oracle failure, governance attack, and economic exploits. Diversify across protocols and never deposit more than you can afford to lose.
What are the fees for Sky / MakerDAO?
Protocol-level fees vary by action and chain. Network gas adds another $0.50-50 depending on chain congestion (much cheaper on L2s and Solana than Ethereum mainnet). Always preview fees before confirming.
Can I undo the transaction?
On-chain transactions are irreversible. Always test with small amounts first, double-check addresses and amounts, and use simulation tools (Tenderly, Pocket Universe) to preview the outcome.
Does Sky / MakerDAO have an audit?
Yes — Sky / MakerDAO has been audited by tier-1 firms (typically Trail of Bits, OpenZeppelin, ChainSecurity, Zellic, Spearbit). Audit reports are linked from the official docs. Audits reduce but never eliminate risk.
What is impermanent loss / liquidation risk?
For LP positions, impermanent loss is the difference between holding the LP vs holding the underlying tokens — it grows with price divergence. For lending positions, liquidation risk grows as collateral price falls; maintain a health factor well above 1.