Why MKR Could Surge Despite Market Downturns in 2025

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The broader cryptocurrency market may be navigating a period of uncertainty, but certain assets are showing signs of resilience—and even growth. Among them, MKR (now rebranded as SKY) stands out as a prime candidate for strong performance in Q1 and Q2 of 2025. Despite lukewarm reception to its rebranding, MKR’s fundamentals remain robust, supported by powerful catalysts including a $30 million monthly buyback program, DAI/USDS supply nearing all-time highs, and the upcoming launch of SPK farming on Spark Protocol.

These developments suggest that MKR—now SKY—is poised for a potential upside surge, even in a bearish macro environment.

The Return of Aggressive Buybacks

One of the most compelling reasons to be bullish on MKR is the resumption of its aggressive token buyback program. Following a governance proposal passed on February 24, an additional $55 million in USDS has been allocated specifically for repurchasing MKR tokens.

The protocol will now execute buybacks at a rate of $30 million per month**, or roughly **$1 million per day. At MKR’s current price of $1,600, this equates to the removal of approximately 1.9% of total supply each month—a significant deflationary pressure that could drive scarcity and upward price momentum.

To put this into perspective: over the past 4.5 years, MicroStrategy acquired about 2% of Bitcoin’s total supply. MKR’s buyback pace is comparable—but compressed into just a few months.

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Moreover, these figures don’t even account for the protocol’s organic profitability. MakerDAO generates around **$125 million in annual net revenue** ($10.4 million monthly), primarily from stability fees and yield-generating strategies like direct treasury investments and real-world asset (RWA) lending. This sustainable income stream ensures that buybacks aren't just temporary—they're backed by real economic activity.

While the rebrand from MKR to SKY and DAI to USDS initially dampened sentiment—evidenced by USDS supply briefly dipping to $4.5 billion—the fundamentals have quietly strengthened. Today, stablecoin supply is rebounding and approaching record levels.

In markets, it's often said: "The best opportunities arise when fundamentals improve while sentiment lags." That’s exactly the narrative unfolding with MKR.

SPK Farming: A New Engine for Growth

Another major catalyst on the horizon is the anticipated launch of SPK token farming on Spark, a $3 billion TVL lending and asset management platform spun out from MakerDAO.

Unlike traditional token launches with VC allocations or pre-sales, SPK is designed as a fair-distribution token. Users will only be able to earn SPK by staking either USDS or SKY, creating direct demand for both the stablecoin and the governance token.

This design has powerful implications:

Half of the total $SPK supply (50%) will be distributed within the first two years. If we conservatively estimate SPK’s fully diluted valuation (FDV) at **$1 billion, that means $500 million in incentives** will flow directly to SKY and USDS stakers.

This isn’t just a short-term yield play—it’s a structural upgrade to Maker’s ecosystem economics. By subsidizing USDS growth through attractive staking rewards, Spark effectively fuels a self-reinforcing cycle: more stablecoin issuance leads to more revenue, which funds more buybacks, boosting MKR value.

And SPK is just the beginning. Additional subDAOs—such as Solana Star and RWA Star—are expected to launch in the coming months, each potentially introducing new revenue streams and expanding Maker’s footprint across multiple chains and asset classes.

Regulatory Tailwinds: The GENIUS Act

Beyond technical and economic catalysts, regulatory developments could provide another layer of upside for MKR holders.

The GENIUS Act (Generative, Explainable, Non-discriminatory Innovation in US Stablecoins Act) aims to establish a federal regulatory framework for payment stablecoins in the United States. While Circle (issuer of USDC) is likely to be a primary beneficiary, the bill could indirectly support other decentralized stablecoin ecosystems by legitimizing the broader category.

If GENIUS gains traction and sparks positive headlines, MKR could emerge as a key liquidity play within the stablecoin narrative. Traders seeking exposure to regulated yet decentralized stablecoin infrastructure may increasingly turn to Maker as a proxy.

Although this catalyst is less immediate than buybacks or SPK farming, it adds another dimension to MKR’s demand profile—especially in a market where regulatory clarity is highly valued.

FAQ: Your Questions About MKR and SKY Answered

Q: Is MKR the same as SKY?
A: Yes. MKR has been rebranded to SKY as part of MakerDAO’s evolution into Sky, but it remains the same governance token with identical functionality and supply.

Q: How does the $30M monthly buyback work?
A: The Maker Protocol uses surplus USDS reserves to purchase MKR from the open market, then burns those tokens. This reduces circulating supply and increases scarcity over time.

Q: Can anyone participate in SPK farming?
A: Yes. SPK farming is permissionless—users stake USDS or SKY via Spark’s platform to earn rewards. There are no private sales or allocations.

Q: What happens if SPK FDV exceeds $1B?
A: Higher FDV means greater value distributed to stakers, which could further boost demand for USDS and SKY—amplifying the flywheel effect.

Q: Is the rebrand hurting adoption?
A: Initially, yes—sentiment dipped after the rebrand. But with USDS supply recovering and new incentives launching, usage appears to be rebounding.

A Contrarian Play with Strong Fundamentals

It’s true—the rebrand from MakerDAO to Sky didn’t resonate with everyone. The shift in branding coincided with a prolonged downtrend from April 2024 to February 2025, suggesting market skepticism was already priced in.

But now, with multiple growth engines activating simultaneously, the narrative is shifting.

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What makes MKR particularly attractive is its historical tendency to outperform during volatile or uncertain markets. Its diversified revenue model—spanning DeFi yields, RWAs, and protocol-owned liquidity—provides resilience when other projects struggle.

And with increasing institutional interest in yield-bearing stablecoins and transparent on-chain treasuries, Maker’s long-term vision aligns perfectly with emerging trends.

Final Outlook: Why 2025 Could Be MKR’s Breakout Year

Despite short-term headwinds, MKR (SKY) sits at the intersection of several powerful forces:

While sentiment may have lagged during the rebrand phase, fundamentals have continued to strengthen. As these catalysts unfold throughout 2025, we believe MKR is well-positioned for a significant rebound—even in a sideways or bearish market.

For investors seeking asymmetric upside with strong fundamental backing, MKR offers one of the most compelling risk-adjusted opportunities in the current cycle.

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