Aligned Delegates

Introduction

Aligned Delegates (ADs) are professional governance participants within Sky Protocol who commit to upholding the Sky Atlas and voting according to its principles while receiving delegated voting power from SKY token holders. ^[1] As anonymous Alignment Conservers, they play a critical role in Sky's decentralized governance framework by enabling token holders to participate indirectly through delegation while maintaining alignment with the protocol's core values and strategic direction. ^[2]

The Aligned Delegate system represents Sky Protocol's solution to a fundamental challenge in decentralized governance: how to maintain active, informed, and aligned decision-making when most token holders lack the time, expertise, or inclination to participate directly in every governance decision. ^[3] By professionalizing governance participation through structured compensation, performance metrics, and strict alignment requirements, the AD system attempts to balance decentralization with effectiveness.

As of January 2026, Sky Protocol recognizes eleven active Aligned Delegates: Bonapublica, PBG, WBC, BLUE, Cloaky, AegisD, Excel, Tango, Max Staking Yield, Sky Staking, and Kuzmich. ^[4] These delegates collectively manage significant voting power delegated from the broader SKY token holder community, making them among the most influential actors in Sky's governance ecosystem. Three of these delegates hold "Ranked Delegate" status, qualifying them for enhanced compensation ranging from 48,000 to 400,000 USDS annually depending on their tier and performance metrics. ^[5][6]

Because Aligned Delegates directly control large amounts of incentivized SKY voting power, they are both highly influential and potentially risky actors within the governance framework. ^[2] The Sky Atlas therefore subjects ADs to strict requirements enforced by the Governance Scope, including anonymity mandates, operational security protocols, kickback prohibitions, and voting communication obligations. ^[7][8][9] Violations of these requirements can result in penalties, derecognition, and loss of compensation eligibility.

The AD framework evolved from MakerDAO's earlier "Recognized Delegate" program, which operated from 2022 through early 2024 and distributed DAI compensation to delegates who met participation thresholds. ^[10][11] The transition to the Sky Atlas framework in 2024 formalized more rigorous alignment requirements, introduced tiered compensation structures, and established clearer enforcement mechanisms for delegate accountability.

Historical Evolution from MakerDAO Delegation

The Aligned Delegate framework emerged through several iterations of delegation experimentation within MakerDAO, each attempting to address governance participation challenges while managing the risks of centralized voting power.

Early MakerDAO Delegation (2019-2021)

MakerDAO's initial governance structure relied primarily on direct token holder participation, with MKR holders locking their tokens in the DSChief contract to vote on executive proposals. ^[12] However, voter participation remained consistently low, typically involving only a few dozen unique addresses despite the protocol managing billions of dollars in collateral. This concentration of voting power among a small number of highly engaged participants created both efficiency and centralization concerns.

The MakerDAO community experimented with informal delegation mechanisms where token holders could voluntarily delegate their voting power to trusted community members. ^[13] These early delegates operated without formal recognition, compensation, or standardized requirements, functioning more as community leaders who attracted delegation through reputation and consistent participation rather than as structured governance roles.

The concept of "Shadow Delegates" also emerged during this period, representing individuals with whom MKR holders had personal or professional relationships. ^[14] Token holders were encouraged to consider delegating to Shadow Delegates when there were no Recognized Delegates, or when MKR was concentrated in the hands of too few Recognized Delegates, providing an alternative delegation pathway for those preferring to delegate to individuals they knew personally.

Recognized Delegate Program (2022-2024)

The formal Recognized Delegate program launched through MIP61 in early 2022, establishing the first structured compensation framework for governance delegates. ^[15] This program marked a significant shift from volunteer participation to professionalized governance engagement, with delegates receiving monthly DAI compensation based on their participation metrics and delegated voting power.

Under the Recognized Delegate framework, participating delegates were required to meet several criteria:

• Maintain a minimum threshold of delegated MKR voting power
• Participate in at least 90% of governance polls and executive votes
• Provide public explanations for their voting decisions on the MakerDAO forum
• Deploy a delegate contract to enable secure delegation from token holders

Compensation under MIP61 varied based on participation levels and delegated voting power. Historical executive votes show substantial delegate payments throughout 2022 and early 2023:

• March 2022: 57,665 DAI distributed to eight Recognized Delegates ^[16]
• July 2022: 85,185 DAI distributed to 14 Recognized Delegates ^[17]
• September 2022: 117,445 DAI distributed to sixteen Recognized Delegates ^[18]
• January 2023: 108,690 DAI distributed to eighteen Recognized Delegates ^[19]

The program demonstrated both successes and limitations. Positive outcomes included increased consistent voter turnout, higher quality forum discussions as delegates explained their rationales, and better informed decision-making as professional delegates invested time in understanding complex technical proposals. However, concerns emerged about voting power concentration among a small cohort of delegates, potential echo chamber effects as delegates influenced each other's positions, and questions about whether compensation incentivized genuine alignment or merely procedural compliance.

By early 2023, some community members raised concerns about delegate centralization, noting that a small number of entities controlled the majority of delegated voting power. ^[20] These concerns intensified during contentious votes where delegate voting patterns diverged from broader community sentiment expressed in forum discussions, raising questions about whether delegates genuinely represented their delegators' preferences or primarily advanced their own views.

Transition to Aligned Delegates (2024)

The Endgame Plan's implementation and the broader Sky rebrand in 2024 triggered a fundamental restructuring of the delegate framework. ^[21][22] The new Sky Atlas replaced MIP61's Recognized Delegate system with the more stringent Aligned Delegate framework, introducing several critical changes:

The most significant shift involved the introduction of explicit alignment requirements, moving beyond simple participation metrics to mandate that delegates actively uphold the "Spirit of the Atlas" and maintain "Universal Alignment" with Sky Ecosystem values. ^[2] This change reflected a philosophical evolution from viewing delegates merely as voting representatives to positioning them as guardians of protocol alignment.

The Atlas framework also introduced the Ranked Delegate system, creating a three-tier compensation structure based on delegated voting power rather than the more uniform compensation approach of MIP61. ^[5] This tiered approach concentrated higher compensation on delegates who successfully attracted larger delegation, theoretically rewarding those who built greater community trust while creating stronger incentives for delegate competition.

Additionally, the transition formalized stricter operational security and anonymity requirements, mandating that ADs maintain "a high level of operational security, adhering to best practices in privacy, cybersecurity, and physical resilience." ^[23] These requirements acknowledged that ADs controlling substantial voting power could become targets for coercion, bribery, or attack, necessitating protective measures to safeguard both individual delegates and the broader ecosystem.

The prohibition on kickbacks also became more explicit under the Atlas framework, clearly stating that "Aligned Delegates are not allowed to provide 'kickbacks' from their compensation to SKY holders who delegate to them." ^[9] This rule addressed concerns that delegates might attempt to purchase delegation through compensation sharing, which would undermine the merit-based delegation model and potentially attract delegates more interested in extracting value than providing governance service.

The transition period involved several months of overlap where both Recognized Delegates under MIP61 and emerging Aligned Delegates under the Atlas operated simultaneously. Executive votes from mid-2024 included both "Recognized Delegate Compensation" and "Aligned Delegate Compensation" line items as the system migrated from the old framework to the new. ^[24][25]

What Are Aligned Delegates

Aligned Delegates serve as the primary vehicle through which SKY token holders can participate in governance without directly voting on every proposal themselves. The AD system attempts to professionalize governance participation while maintaining alignment with the Sky Protocol's foundational principles.

Core Definition and Role

The Sky Atlas defines Aligned Delegates as "anonymous Alignment Conservers that use Delegate Contracts to enable SKY holders to easily and safely delegate their SKY voting power." ^[2] This definition encompasses several essential characteristics that distinguish ADs from casual governance participants or regular token holders.

First, ADs function as Alignment Conservers, a broader category of ecosystem participants who have pledged to support the Atlas and maintain the protocol's alignment with its core principles. ^[26] This designation subjects ADs to both general Alignment Conserver requirements and specific AD requirements, creating a dual layer of accountability and obligation.

Second, ADs must maintain anonymity, operating through pseudonymous identities rather than revealing their real-world persons or entities. ^[23] This anonymity requirement serves multiple purposes: protecting delegates from external pressure or coercion, preventing conflicts of interest based on real-world relationships, and enabling meritocratic evaluation based on governance performance rather than reputation, connections, or authority outside the protocol.

Third, ADs utilize Delegate Contracts—bespoke Sky smart contracts that allow SKY holders to delegate voting strength associated with their SKY holdings to the particular AD. ^[27] Every AD must deploy at least one Delegate Contract, which serves as the technical mechanism through which they cast votes in Sky Governance. Token holders delegate by locking their SKY into the AD's Delegate Contract, which then accumulates voting power that the AD can exercise.

Primary Responsibilities

The primary responsibility of ADs is to use their delegated power to uphold the Spirit of the Atlas and maintain Universal Alignment of the Sky Ecosystem. ^[2] This broad mandate encompasses several specific obligations:

ADs must participate actively in governance votes, both executive votes that enact protocol changes and governance polls that signal community preferences. ^[28] The Atlas establishes strict participation thresholds, requiring Ranked Delegates to maintain at least 95% voting participation over a six-month rolling window to avoid budget reductions, with complete budget elimination if participation falls below 75%. ^[29]

Beyond simply voting, ADs must provide explanations for their voting decisions, making their rationale transparent to the token holders who delegated voting power to them. ^[30] This communication requirement ensures delegates can be held accountable for their decisions and enables delegators to evaluate whether the AD continues to represent their values and preferences. Similar to voting participation, communication metrics also affect compensation, with budget reductions applied if ADs fail to explain their votes at least 95% of the time. ^[30]

ADs also bear responsibility for preventing abuse of their power and safeguarding the ecosystem against misaligned actions from other governance actors. ^[1] This watchdog function positions ADs as active defenders of protocol integrity rather than passive vote executors, expected to identify and oppose proposals that violate the Atlas or threaten ecosystem alignment even if such proposals might enjoy temporary community support.

Influence and Risk Profile

Because ADs directly control large amounts of incentivized SKY voting power, they represent both valuable contributors and potential vulnerabilities within the governance framework. ^[2] The dual nature of their position requires carefully balanced empowerment and constraint.

On the empowerment side, ADs wield substantial influence over protocol direction. A delegate controlling significant voting power can effectively determine whether marginal proposals pass or fail, shape debate through their forum communications, influence other delegates through their voting patterns, and even coordinate collective delegate action on contentious issues. This influence enables ADs to serve as effective stewards of protocol governance, providing consistent, informed oversight that might be impossible through pure direct democracy.

However, this same influence creates risks. A malicious or compromised AD could vote for harmful proposals, collude with other governance actors to push through changes that benefit themselves at the protocol's expense, or use their platform to spread misinformation that sways other voters. ^[2] The anonymity requirement, while protective, also limits accountability—if an AD acts maliciously, there's no real-world legal recourse or reputational damage beyond the protocol's internal enforcement mechanisms.

The Atlas acknowledges these risks by empowering "ADs and other Ecosystem Actors with the tools to derisk ADs' influence in the ecosystem." ^[2] These tools include transparent on-chain voting records that enable anyone to verify AD voting patterns, adjudication processes for investigating alleged misalignment, derecognition procedures that can remove malicious or compromised ADs, and emergency response mechanisms that can override AD voting power in crisis situations.

Alignment Requirements

The Sky Atlas subjects Aligned Delegates to comprehensive alignment requirements designed to ensure they genuinely uphold protocol values rather than merely extracting compensation through mechanical participation. These requirements extend beyond simple voting activity to encompass conduct, security practices, and prohibition of specific behaviors.

Adherence to Sky Atlas Principles

The foundational requirement for all ADs is alignment with the Sky Atlas itself—the comprehensive governance framework that defines protocol operations, values, and processes. ^[2] This alignment obligation means ADs must not only read and understand the Atlas but actively apply its principles when evaluating proposals and making governance decisions.

The Atlas itself is structured as a hierarchy of documents organized into Scopes (Governance, Support, Stability, Agent, Asset), each containing Articles, Sections, Subsections, and Core elements that define specific rules and principles. ^[31] ADs are expected to maintain familiarity with this complex documentation and identify when proposals conflict with Atlas provisions, even if such conflicts are not immediately obvious to casual observers.

This deep Atlas knowledge requirement creates significant barriers to entry for AD applicants. Effective governance participation demands understanding not just what the Atlas says but why particular rules exist, how different Atlas sections interact, and what principles underlie specific provisions. This expertise develops over months of engagement with the ecosystem and cannot be quickly acquired by newcomers hoping to capture delegation and compensation.

Spirit of the Atlas Requirement

Beyond literal compliance with Atlas rules, ADs must uphold the "Spirit of the Atlas"—a more nebulous but critically important concept referring to the underlying values and philosophy that animate the protocol. ^[2] While the Atlas provides extensive specific rules, it cannot anticipate every possible situation or decision, requiring ADs to exercise judgment consistent with Atlas principles even when facing scenarios not explicitly addressed.

The Spirit of the Atlas encompasses principles such as:

• Prioritizing long-term protocol sustainability over short-term gains
• Maintaining decentralization and resilience rather than optimizing purely for efficiency
• Protecting user trust and the integrity of USDS as a stable, reliable stablecoin
• Balancing innovation and experimentation with risk management and security
• Supporting the Endgame vision of SubDAO development and eventual immutable Atlas state

These principles sometimes create tensions or trade-offs where ADs must exercise judgment. For example, a proposal might technically comply with specific Atlas rules while violating the broader principle of decentralization, or might offer short-term revenue gains at the expense of long-term sustainability. ADs facing such dilemmas are expected to prioritize Spirit of the Atlas alignment over narrow rule compliance or immediate optimization.

Operational Security Mandates

ADs are required to maintain "a high level of operational security, adhering to best practices in privacy, cybersecurity, and physical resilience." ^[23] These measures must be implemented "at a level that sufficiently safeguards the Sky Ecosystem from physical risk posed by the potential for attacks against ADs," with operational security protocols "regularly reviewed and updated to address emerging risks and ensure continuous protection of the ecosystem." ^[23]

The operational security mandate recognizes that ADs controlling substantial voting power become potential targets for various attacks:

• Coercion attempts where attackers threaten ADs to force particular votes
• Bribery offers where external parties attempt to purchase AD voting support
• Account compromise where hackers attempt to gain control of AD delegate contracts
• Social engineering attacks targeting ADs to extract information or manipulate decisions
• Physical threats in cases where AD anonymity is compromised

To mitigate these risks, the Atlas requires ADs to implement appropriate security practices. While the Atlas does not prescribe specific security measures (recognizing that detailed requirements might expose vulnerabilities or become outdated as threats evolve), reasonable practices would likely include:

• Using hardware wallets for controlling delegate contract keys
• Implementing operational security compartmentalization between AD identity and real-world identity
• Employing encrypted communications for sensitive governance coordination
• Maintaining physical security practices that prevent real-world identification
• Regular security audits of tools and practices to identify vulnerabilities

The requirement that ADs "regularly review and update" their operational security protocols reflects the evolving threat landscape. ^[23] Security practices sufficient in 2024 may be inadequate by 2026 as attack techniques advance, requiring ongoing vigilance and adaptation rather than static compliance with initial standards.

Anonymity Requirements

The Atlas mandates that ADs maintain anonymity, operating through pseudonymous identities rather than revealing real-world persons or entities. ^[23] This requirement exists in tension with the broader ecosystem preference for transparency, creating a deliberate trade-off where the benefits of anonymity are judged to outweigh the accountability advantages of public identification.

The anonymity requirement serves several protective functions. Most importantly, it shields ADs from external pressure that might compromise their ability to vote according to Atlas principles and delegator interests. If an AD's real-world identity were public, they might face pressure from employers, business partners, family members, or other relationships that conflict with protocol alignment. Anonymity enables ADs to prioritize ecosystem interests without fearing personal consequences.

Anonymity also prevents conflicts of interest based on real-world relationships or positions. If ADs were publicly identified, their votes might be perceived as influenced by external affiliations even when genuinely aligned. A publicly identified AD who works for a DeFi protocol might face suspicion when voting on proposals affecting that protocol, whereas an anonymous AD can vote on merits without such perception concerns.

Additionally, anonymity enables meritocratic evaluation based on governance performance rather than external reputation, credentials, or authority. Token holders evaluating which AD to delegate to must assess voting records, communication quality, and demonstrated Atlas understanding rather than relying on real-world credentials or relationships. This forces delegates to earn trust through governance actions rather than leveraging outside status.

However, anonymity also creates accountability challenges. If an AD acts maliciously or incompetently, there is no real-world reputational damage or legal recourse beyond protocol-internal enforcement. An AD who is derecognized can potentially re-emerge under a new pseudonym, attempting to re-establish themselves without the consequences of their previous actions following them. The Core Facilitator must therefore rely on on-chain evidence, governance communications, and behavioral patterns rather than real-world identity verification when enforcing AD requirements.

Prohibition on Kickbacks

The Atlas explicitly prohibits Aligned Delegates from providing "kickbacks" from their compensation to SKY holders who delegate to them, with violation constituting misalignment. ^[9] This prohibition addresses a potential gaming dynamic where ADs might attempt to purchase delegation through compensation sharing rather than earning it through governance quality.

Without the kickback prohibition, ADs might advertise arrangements like "delegate to me and receive 50% of my compensation back as a dividend," effectively bribing token holders for delegation. Such arrangements would create several problems:

First, kickback competition would shift delegate selection from merit-based evaluation to simple price competition, with delegates competing to offer the highest kickback percentage rather than the highest quality governance. Token holders would optimize for financial return rather than governance alignment, potentially delegating to ADs who plan to vote against their actual interests while paying attractive kickbacks.

Second, kickback structures would concentrate delegation among ADs willing to sacrifice most of their compensation for delegation acquisition, potentially attracting delegates who view the role as a stepping stone or networking opportunity rather than genuine governance service. ADs accepting minimal net compensation might be those planning to monetize the position through other means (such as insider knowledge, front-running governance decisions, or using AD status for external credibility) rather than those committed to quality governance work.

Third, kickbacks would reduce the effective compensation available for actual governance work, as ADs would need to reserve substantial portions for redistribution. This would decrease the professionalization effect that compensation is meant to enable, as ADs couldn't justify significant time investment given reduced effective earnings.

The kickback prohibition therefore attempts to ensure delegates compete on governance quality rather than financial incentives, maintain compensation at levels that support professional engagement, and preserve delegation as a trust-based relationship rather than a transactional arrangement.

Emergency Contact and Availability Requirements

The Atlas establishes an emergency contact mechanism for reaching ADs during crisis situations, though specific implementation details are delegated to Core Facilitator development. ^[32] This requirement recognizes that governance emergencies may require rapid AD response outside normal governance cycles, necessitating reliable communication channels that respect anonymity while enabling urgent coordination.

Emergency situations might include:

• Critical security vulnerabilities requiring immediate executive vote response
• Market crisis events similar to Black Thursday requiring rapid parameter adjustments
• Governance attacks where malicious proposals need coordinated opposition
• Technical failures in protocol smart contracts requiring emergency spell deployment

During such events, the ability to rapidly contact and coordinate ADs becomes essential. The emergency contact mechanism must balance several competing requirements: maintaining AD anonymity while ensuring messages reach the actual AD rather than getting lost in spam filters, providing secure communication that cannot be intercepted or impersonated by attackers, enabling rapid response verification so coordinators can confirm which ADs have received and acknowledged emergency messages, and supporting coordination among multiple ADs without requiring direct AD-to-AD communication that might compromise anonymity.

The Core Facilitator's responsibility for establishing and maintaining this emergency contact infrastructure reflects the critical importance of reliable AD communication during crisis periods. ^[32] The system must be regularly tested to ensure it functions when needed, as an emergency contact mechanism that fails during actual emergencies provides false confidence worse than having no system at all.

Ranked Delegates and Compensation Structure

The Sky Atlas establishes a sophisticated compensation framework for Aligned Delegates through the Ranked Delegate system, creating tiered compensation levels based on delegated voting power and performance metrics. This structure attempts to reward delegate quality and delegation success while constraining total protocol expenditure on governance compensation.

Ranked Delegate Concept

Ranked Delegates are "Aligned Delegates who are eligible to receive a budget from the Sky Protocol and have additional rights and responsibilities" beyond the baseline AD requirements. ^[33] Not all ADs are Ranked Delegates—the system reserves compensation for those who successfully attract substantial delegation, creating a merit-based filtering mechanism where only ADs demonstrating community trust receive protocol funding.

The distinction between ADs and Ranked Delegates creates a two-tier structure within the delegate ecosystem. All Ranked Delegates are ADs, subject to all AD requirements and restrictions, but not all ADs are Ranked Delegates. ADs who fail to attract sufficient delegation to reach Ranked status can still participate in governance using their delegated voting power, but they receive no protocol compensation for their participation.

This structure provides a pathway for new ADs to establish themselves in the ecosystem. An aspiring delegate can deploy a delegate contract, submit recognition materials to the Core Facilitator, and begin participating in governance and building reputation through voting and communication even before reaching Ranked status. ^[34] If they demonstrate quality governance and build delegator trust, they may eventually attract sufficient delegation to reach the Level 3 Ranked Delegate threshold, at which point they become eligible for compensation.

The progression also works in reverse—Ranked Delegates who lose delegation may fall out of ranked status if other ADs surpass them in delegated voting power. This creates ongoing competitive pressure for Ranked Delegates to maintain governance quality and delegator satisfaction rather than coasting on past reputation.

Three-Tier Ranking System

The Ranked Delegate framework establishes three compensation tiers (Level 1, Level 2, and Level 3) with distinct budget allocations and selection criteria for each level.

Level 1 Ranked Delegates

Level 1 represents the highest compensation tier, with each Level 1 Ranked Delegate eligible for 400,000 USDS per year in budget allocation. ^[35] This substantial compensation—equivalent to a senior executive salary in many jurisdictions—reflects the expectation that Level 1 Delegates will dedicate significant professional time and expertise to governance participation.

As of the Atlas documentation reference point, two ADs hold Level 1 Ranked Delegate status: BLUE and Cloaky. ^[36] These two delegates have attracted the highest levels of delegated voting power among all ADs (excluding any specially designated Level 1 or Level 2 positions), demonstrating exceptional community trust and delegation success.

The 400,000 USDS annual budget enables Level 1 Delegates to potentially operate as full-time governance professionals or even fund small teams. At this compensation level, delegates could reasonably employ research assistance, technical analysis support, or administrative help, enabling more sophisticated governance participation than individual delegates could provide alone.

Level 2 Ranked Delegates

Level 2 Ranked Delegates receive 175,000 USDS per year, representing a substantial reduction from Level 1 but still a significant professional compensation level. ^[37] This tier likely supports dedicated part-time governance engagement or full-time engagement in combination with other income sources.

Currently, Bonapublica holds Level 2 Ranked Delegate status. ^[38] The single occupant of this tier (compared to two Level 1 delegates) suggests either a specific Atlas designation for this position or that Bonapublica holds delegated voting power substantially below the Level 1 delegates but above all Level 3 delegates.

The approximately 2.3x difference between Level 2 and Level 1 compensation (175,000 vs 400,000 USDS) reflects a significant but not overwhelming disparity. This structure creates meaningful incentive to advance from Level 2 to Level 1 while ensuring Level 2 compensation remains professional-grade rather than token acknowledgment.

Level 3 Ranked Delegates

Level 3 Ranked Delegates receive 48,000 USDS per year, representing the entry tier for compensated governance participation. ^[39] While substantially lower than Level 1 and Level 2, this compensation still exceeds the median annual income in many jurisdictions and could support serious part-time governance engagement.

Level 3 Ranked Delegates are defined as "the Aligned Delegates with the greatest delegated Voting Power who are not Level 1 Ranked Delegates or Level 2 Ranked Delegates." ^[40] This definition creates a dynamic, competitive tier where the number of Level 3 delegates is not fixed in advance but rather determined by how many ADs successfully attract meaningful delegation beyond any established threshold.

The selection mechanism for Level 3 creates ongoing competition among ADs. As new ADs attract delegation and existing unranked ADs grow their delegation, they may surpass the current lowest-ranked Level 3 delegate, triggering a shift where the new AD gains Level 3 status and the previous lowest delegate loses ranking and compensation eligibility. This competitive dynamic encourages continuous governance quality and delegator engagement rather than complacent maintenance of established positions.

AD Buffer and Compensation Mechanics

Ranked Delegates do not receive direct monthly payments but rather accumulate compensation in an "AD Buffer"—an account of USDS that begins accumulating funds when an AD attains Ranked Delegate status. ^[41] The budget allocated to the AD is credited to the AD Buffer over time, but funds within the buffer "cannot be accessed or spent until they reach a minimum threshold equivalent to one (1) month's budget allocation based on the current level of the Ranked Delegate." ^[41]

This accumulation mechanism serves several purposes. First, it creates a vesting period where new Ranked Delegates must maintain their status and performance for at least one month before receiving any compensation. This prevents gaming where an AD briefly achieves Ranked status, immediately withdraws funds, and then abandons active participation.

Second, the buffer provides a reservoir from which penalties can be deducted if the Core Facilitator determines an AD has conducted misaligned acts. ^[42] Rather than pursuing complex claw-back mechanisms to recover already-distributed funds, penalties can simply be deducted from accumulated buffer amounts, providing straightforward enforcement.

Third, the buffer creates natural exposure to USDS, aligning AD incentives with stablecoin stability. An AD accumulating substantial USDS buffer balance has direct financial interest in maintaining USDS peg stability and protocol health, as any USDS depegging event would directly impact their accumulated compensation value.

Once the minimum threshold is met, "the AD will receive payouts from the AD Buffer to the address that controls the AD Delegate Contract." ^[41] ADs may use this budget for "various purposes, including personal compensation, compensation for team members, research expenses, and other relevant activities." ^[41] This flexible use framework recognizes that different ADs may structure their operations differently—some operating individually, others coordinating with teams or hiring specialized support.

Monthly Compensation Cycle

Aligned Delegates receive payments from their AD Buffers through a monthly compensation cycle managed by the Core Facilitator. ^[43] This administrative process involves several calculations:

First, the Core Facilitator must calculate "the Aligned Delegates ranked as Level 3 Ranked Delegates on a daily basis." ^[43] This daily calculation reflects the dynamic nature of Level 3 ranking, where changes in delegated voting power can shift which ADs qualify for the tier. If an AD gains sufficient delegation to surpass the current lowest Level 3 delegate, they should begin accruing compensation as soon as the change occurs rather than waiting until the next monthly cycle begins.

Second, the Core Facilitator calculates "the budget to be deposited into each Aligned Delegate's AD Buffer, which is modified pursuant to voting and communication metrics." ^[43] This calculation applies the performance-based budget modifications discussed in the next section, increasing or decreasing compensation based on each AD's voting participation and communication compliance.

Third, the Core Facilitator determines "the balance of each Delegate's AD Buffer," tracking accumulated compensation over time and accounting for any previous payouts or penalty deductions. ^[43]

Finally, the Core Facilitator calculates "the amount to be paid out to each Aligned Delegate" based on buffer balances and the minimum threshold requirements for withdrawal eligibility. ^[43]

Once calculated, "AD payouts are paid from the Aligned Delegates Buffer Multisig," a dedicated multisig wallet funded through Sky Protocol's treasury allocation system. ^[43] The use of a multisig for payouts provides security against single-point compromise while enabling timely compensation distribution without requiring individual executive votes for each monthly payment cycle.

Voting-Activity Performance Metrics

Ranked Delegate compensation is "modified based on their voting-activity metrics over the past six (6) months," taking into account "the overall participation of the Ranked Delegate in all votes they are eligible to cast as an Aligned Delegate." ^[29]

The Atlas establishes a 95% participation threshold as the baseline for full compensation. "If an RD participates in less than 95% of all eligible votes within the last six (6) months, their RD budget is reduced." ^[29] The reduction applies "on a proportional linear scale: for every percentage point below 95% voting activity, the RD's budget is reduced correspondingly." ^[29]

For example, an RD maintaining 94% participation would experience approximately a 1% budget reduction, receiving roughly 396,000 USDS instead of the full 400,000 USDS annual allocation for Level 1. An RD with 90% participation would face approximately a 5% reduction, receiving roughly 380,000 USDS instead of the full amount.

The system includes a complete elimination threshold at 75% participation: "Should an RD's voting activity fall to 75% of all eligible votes within the last six (6) months, they become completely ineligible to receive RD income." ^[29] At this point, compensation halts entirely regardless of tier, and if the RD is a Level 3 Ranked Delegate, "their RD rank, and the budget eligibility associated with that rank, is transferred to the next highest-ranking AD, as determined by total amount of SKY delegated to their Delegate Contract." ^[29]

This threshold creates a hard floor for acceptable participation. An RD who misses more than one in four votes over a six-month period is deemed insufficiently engaged to justify compensation, with their rank and associated budget reallocated to more active participants. The policy recognizes that occasional missed votes are inevitable (95% allows missing approximately one vote per month), but systematic non-participation indicates fundamental role abandonment rather than temporary unavailability.

The six-month rolling window for participation calculation means performance impacts are neither immediate nor permanent. An AD who experiences a period of reduced participation due to personal circumstances won't instantly lose compensation but will see gradual budget reduction as the low-participation months enter the calculation window. Conversely, an AD who improves participation can gradually restore full compensation as high-participation months replace low-participation months in the rolling calculation.

Voting-Communication Performance Metrics

Parallel to voting-activity metrics, Ranked Delegate compensation is also "modified based on their voting-communication metrics over the past six (6) months." ^[30] An AD is "required to provide an explanation for each vote they participate in," and budget modification accounts for "the Ranked Delegate's fulfillment of this voting-communication requirement in all votes they are eligible to cast." ^[30]

The communication metrics use the same threshold structure as voting-activity metrics: 95% baseline, proportional linear reduction for performance below threshold, and complete elimination at 75%. "If an RD provides the required voting-communication on less than 95% of all eligible votes within the last six (6) months, their RD budget stream is reduced" at a rate of one percentage point reduction for every percentage point below 95% communication activity. ^[30]

Similarly, "should an RD's voting-communication activity fall to 75% of all eligible votes within the last six (6) months, they become completely ineligible to receive RD income," with Level 3 rank transfer to the next highest-ranking AD. ^[30]

The voting-communication requirement serves multiple purposes. Most fundamentally, it creates transparency enabling delegators to understand why their chosen AD voted particular ways and evaluate whether those rationales align with their own values and preferences. Without communication requirements, delegators would only know how their AD voted, not why, making meaningful evaluation nearly impossible.

Communication also creates accountability mechanisms beyond the Core Facilitator's formal enforcement. An AD who provides poor rationales or explains votes in ways that reveal misalignment or incompetence faces delegator backlash in the form of delegation withdrawal, creating market-based enforcement that complements protocol-level rules. This distributed accountability is arguably more powerful than centralized enforcement, as it operates continuously and automatically rather than depending on Core Facilitator investigation and action.

Additionally, voting communication contributes to broader ecosystem education and deliberation quality. When multiple ADs explain their reasoning on complex proposals, they collectively create a knowledge base that helps less engaged token holders understand issues and make informed decisions about whether to vote directly, which AD to delegate to, or whether to switch delegation based on demonstrated alignment.

However, the Atlas acknowledges uncertainty about specific communication quality standards. The Needed Research section NR-10 poses critical questions: "Should there be explicit criteria for Aligned Delegates' voting-communications? What constitutes an adequate explanation for each vote? How would the Core Facilitator evaluate ADs' explanations for quality, completeness, etc.?" ^[30]

These questions highlight inherent challenges in enforcing qualitative communication requirements. If the Core Facilitator establishes overly specific criteria, they risk creating checklist compliance where ADs mechanically satisfy format requirements without providing genuinely useful explanations. If criteria remain vague, enforcement becomes subjective and potentially inconsistent, with ADs uncertain about what constitutes adequate communication and the Core Facilitator potentially applying different standards to different delegates.

The research questions also note contextual variation: "How might ADs' explanations vary across different types of votes, and should the criteria reflect these differences? Should more complex or high-stakes votes require more detailed explanations than routine or procedural votes?" ^[30] A vote on complex collateral risk parameters might merit extensive technical analysis, whereas a routine parameter adjustment might require only brief acknowledgment of the rationale.

Treasury Allocation to Aligned Delegates

The AD compensation budget derives from Sky Protocol's treasury allocation framework, specifically from Step 1 of the capital allocation waterfall. Under the Treasury Management structure defined in the Support Scope, "up to 1% of Step 1 Capital is allocated to Aligned Delegates." ^[44]

This 1% allocation cap creates an upper bound on total AD compensation regardless of how many Ranked Delegates exist. If we assume Step 1 Capital represents Sky Protocol's surplus or operating revenue, a 1% allocation suggests AD compensation is viewed as an operational expense comparable to other governance and security functions rather than as a primary value distribution mechanism like staking rewards or buybacks.

The "up to" qualifier provides flexibility to reduce AD allocation if the number of Ranked Delegates decreases or if compensation structures are adjusted downward. This prevents locked-in expenditure commitments that might become excessive if delegate participation declines or if the community decides to reduce compensation levels through future Atlas edits.

The Step 1 allocation positioning—before staking rewards, buybacks, and other value distributions—signals that AD compensation is considered an essential security and operational expense rather than a discretionary distribution. The protocol prioritizes funding competent governance oversight before distributing value to passive token holders, reflecting the view that effective governance protection is foundational to all other protocol functions.

During the transitional period, a dedicated Aligned Delegates Buffer multisig was established to hold allocated AD compensation funds. ^[45] This buffer arrangement provides operational flexibility for monthly compensation distributions without requiring individual executive votes for each payout while maintaining security through multisig controls and transparent on-chain accountability.

Delegate Recognition Process

Becoming a recognized Aligned Delegate requires completing a formal application and recognition process administered by the Core Facilitator. This process establishes baseline standards that all ADs must meet before beginning to participate as delegates and ensures proper technical infrastructure for delegation.

Recognition Requirements

Applicants "must be formally recognized as Aligned Delegates by the Core Facilitator upon fulfilling all requirements" defined in the recognition process documentation. ^[34] This recognition is not automatic—the Core Facilitator exercises judgment in evaluating applications and can reject applicants who fail to meet requirements or demonstrate potential misalignment.

The recognition process serves as the first filter preventing unsuitable participants from becoming ADs. By requiring Core Facilitator approval, the system creates accountability for initial AD quality rather than allowing anyone to self-declare as an AD and begin attracting delegation. This gatekeeping function becomes especially important given AD anonymity—if anyone could become an AD without oversight, the ecosystem would have no protection against bad actors establishing delegate positions.

Delegate Contract Deployment

The first technical requirement involves deploying a Delegate Contract—"a bespoke Sky smart contract that allows SKY holders to delegate the voting strength associated with their SKY holdings to a particular Aligned Delegate." ^[27] Every AD must have at least one Delegate Contract, as this contract serves as the mechanism through which they accumulate delegated voting power and cast votes in governance.

The Delegate Contract functions as both a technical voting mechanism and an identity marker. The contract address becomes the AD's on-chain identity, used for all governance communications, voting records, and compensation receipts. Token holders delegate by interacting with this contract address, and the protocol tracks the AD's governance participation through this contract's voting history.

The requirement that ADs deploy their own Delegate Contracts rather than using shared infrastructure ensures each AD has exclusive control over their voting power and that all voting activity can be unambiguously attributed to the specific AD. This prevents situations where multiple ADs share contract infrastructure, creating attribution ambiguity about which AD made particular voting decisions.

The Atlas includes an annotation element noting that the Delegate Contract deployment process should follow established procedures for "deploying a delegate contract." ^[46] This suggests standardized deployment procedures exist, likely involving interaction with a Delegate Contract factory that ensures all AD contracts conform to required specifications and security standards.

Submission Message Requirements

After deploying a Delegate Contract, applicants must submit messages proving they control both the AD's Ethereum address and the entity operating the delegate. ^[47] This dual verification serves distinct purposes.

First, applicants must provide "a cryptographically signed message by the Ethereum address" controlling the Delegate Contract. ^[48] This message proves the applicant controls the private keys for the Delegate Contract address, preventing impersonation where someone claims to operate a Delegate Contract they don't actually control. The cryptographic signature provides mathematical proof that the message originator possesses the private key corresponding to the Delegate Contract address.

Second, applicants must provide "a cryptographically signed message by the Ecosystem Actor" operating the delegate. ^[49] This requirement appears to verify the entity or individual operating the AD role, separate from the technical contract control. In practice, this might involve signing a message with a separate verification key or providing additional authentication that the AD entity (distinct from the Delegate Contract) is genuine and not an impersonator.

The dual message requirement creates layered verification—proving both technical control (the applicant can operate the Delegate Contract) and entity authentication (the applicant is genuinely the ecosystem actor claiming to operate the delegate). This layered approach provides stronger assurance than single-factor verification would offer.

Core Facilitator Review and Recognition

Once an applicant completes the technical requirements and submits verification messages, the Core Facilitator reviews the application and makes a recognition decision. The Core Facilitator "must enforce all rules governing Aligned Delegates," including recognition standards. ^[50]

The Core Facilitator's review likely evaluates several factors:

• Technical compliance: Did the applicant properly deploy a Delegate Contract and submit valid verification messages?
• Application completeness: Did the applicant provide all required information and materials?
• Preliminary alignment assessment: Does the applicant's communication and presentation suggest reasonable alignment understanding?
• Red flags: Are there obvious concerns about the applicant's suitability, such as communications suggesting misalignment or technical incompetence?

The Core Facilitator maintains discretion to reject applications even if technical requirements are met, serving as a quality filter that prevents unsuitable candidates from becoming recognized ADs. This discretion is essential given that recognized ADs can immediately begin attracting delegation and participating in votes—without effective filtering, malicious or incompetent actors could establish AD positions and potentially cause governance harm before their unsuitability becomes apparent.

Once the Core Facilitator recognizes an AD, they are added to the official list of Current Aligned Delegates maintained in the Atlas documentation. ^[4] This list provides the authoritative record of which entities are recognized ADs, enabling token holders to verify they are delegating to legitimate, recognized delegates rather than impersonators or unrecognized entities.

Current Active Delegates

As of January 2026, eleven Aligned Delegates hold recognition status and participate actively in Sky Protocol governance. These delegates collectively represent the current cohort of professional governance participants operating under the Atlas framework.

Level 1 and Level 2 Ranked Delegates

The highest tier of delegates includes BLUE and Cloaky, who hold Level 1 Ranked Delegate status with 400,000 USDS annual compensation eligibility. ^[36] Bonapublica occupies the single Level 2 Ranked Delegate position with 175,000 USDS annual eligibility. ^[38]

These three delegates represent the protocol's most heavily compensated governance participants and presumably control the largest shares of delegated voting power. Their elevated status suggests they have successfully built substantial delegator trust through consistent governance participation, communication quality, and demonstrated alignment over time.

BLUE submitted their AD recognition application in the Sky Forum under the thread "BLUE AD Recognition Submission," establishing their identity and beginning their participation in the AD framework. ^[4] Their advancement to Level 1 status indicates successful delegation attraction following initial recognition.

Cloaky similarly established their AD identity through the "Cloaky AD Recognition Submission" forum thread. ^[4] The allocation of both Level 1 positions to BLUE and Cloaky suggests these two delegates have attracted comparable levels of delegation, both exceeding Bonapublica and all other ADs.

Bonapublica operates the longest-standing recognized AD communication thread, titled "Bonapublica Aligned Delegate Communication," which has reached 90 posts as of the Atlas reference point. ^[4] This extensive communication history suggests Bonapublica has participated in AD governance longer than many current delegates, building delegation through sustained engagement over time.

Other Recognized Aligned Delegates

Beyond the three Ranked Delegates, eight additional ADs hold recognition status:

PBG operates an AD communication platform thread titled "PBG Aligned Delegate Communication Platform" with 69 posts. ^[4] The substantial post count indicates active, ongoing governance participation and communication with the community.

WBC maintains communication through the "WBC Aligned Delegate Communications" thread. ^[4] Their inclusion in the recognized delegate list confirms active participation in the AD framework.

AegisD submitted recognition materials through the "AegisD AD Recognition Submission" thread. ^[4] The delegate name suggests a focus on governance protection and defense (aegis referring to protective shields in classical mythology), potentially indicating this delegate's governance approach or values.

Excel joined the recognized AD cohort through the "Excel AD Recognition Submission" thread. ^[4] Their participation expands the recognized delegate pool and provides additional delegation options for token holders.

Tango established AD recognition through the "Tango AD Recognition Submission" forum thread. ^[4] Their addition to recognized ADs increases the diversity of governance perspectives and delegation choices available to the community.

Max Staking Yield submitted recognition materials through "Max Staking Yield AD Recognition Submission." ^[4] The delegate name explicitly references staking yields, potentially indicating this delegate's particular focus or expertise in staking-related governance decisions.

Sky Staking achieved recognition through the "Sky Staking Recognition Submission" thread. ^[4] Similar to Max Staking Yield, the name suggests particular attention to staking mechanisms and staking-related protocol decisions.

Kuzmich rounds out the current recognized delegate list with the "AD Recognition Submission" thread. ^[4] Their inclusion brings the total recognized AD count to eleven as of the Atlas reference documentation.

Delegate Technical Infrastructure

Each recognized AD operates specific technical infrastructure documented in the Current Aligned Delegates list. This infrastructure includes three key components:

First, each AD has an Ecosystem Actor (EA) address—an Ethereum address serving as the AD's primary identity. ^[4] This address is typically distinct from the Delegate Contract address and may serve administrative functions, compensation receipt, or verification purposes.

Second, each AD operates a Delegation Contract address—the smart contract through which token holders actually delegate their SKY voting power. ^[4] This contract address receives SKY deposits from delegators and accumulates the voting weight the AD can exercise in governance votes.

Third, each AD maintains a Forum Post—a dedicated thread on forum.sky.money where they post voting explanations, governance analysis, and communications with delegators and the broader community. ^[4] These forum threads serve as the primary venue for AD communication requirements and enable delegators to evaluate their chosen AD's governance approach.

The Current Aligned Delegates list in the Atlas provides full details for each delegate including EA addresses with Etherscan verification links, Delegation Contract addresses with verification links, and forum thread links. ^[4] This comprehensive documentation enables token holders to verify delegate authenticity and access all necessary information for delegation decisions.

Delegation Mechanics

The technical process through which SKY holders delegate voting power to Aligned Delegates involves several mechanisms that evolved through MakerDAO's governance system upgrades and the transition to Sky Protocol.

Historical Delegation Through DSChief

Under the original MakerDAO governance system, delegation operated through the DSChief contract, where MKR holders locked tokens and received IOU tokens representing their voting weight. ^[12] Delegation involved transferring these IOU tokens to a delegate's address or approving a delegate contract to vote using the locked voting weight.

This system created several limitations. IOU tokens had to be managed carefully to maintain voting power, creating complexity for delegators. The transfer of IOUs between addresses created potential security risks if delegators made mistakes in address specification. Additionally, the IOU token mechanism created friction for changing delegation, as delegators needed to reclaim IOUs and transfer them to new delegates rather than simply updating a preference.

Governance Upgrade to Chief V3 and Vote Delegate V3

The Sky ecosystem governance upgrade introduced Chief V3 (the new governance contract) and Vote Delegate V3 contracts, replacing the legacy DSChief and Delegate V2 infrastructure. ^[51] This upgrade fundamentally changed delegation mechanics and technical implementation.

Under the new system, "all current Governance Delegates must deploy a new Vote Delegate V3 contract using the Vote Delegate Factory V3" at the specific contract address 0x4Cf3DaeFA2683Cd18df00f7AFF5169C00a9EccD5. ^[51] This factory standardizes delegate contract deployment, ensuring all delegate infrastructure conforms to required specifications.

The Chief V3 upgrade eliminated the IOU token mechanism that characterized DSChief. Instead of receiving IOU tokens when locking SKY, the new system tracks voting power directly within the Chief contract, simplifying the user experience and reducing the complexity and security risks associated with managing separate IOU tokens.

For token holders, delegation now involves locking SKY into the Chief contract and assigning voting power to a chosen delegate's V3 contract. ^[51] This can be done through the official Voting Portal interface or by directly calling the lock() function on the Vote Delegate V3 contract. ^[51]

The simplified delegation model reduces friction for changing delegates. Rather than needing to reclaim IOU tokens and transfer them elsewhere, delegators can update their delegation preference directly, with the Chief contract immediately recognizing the new delegation assignment.

Delegation Through Staking Engine

The Sky Protocol governance upgrade also introduced delegation capabilities through the Staking Engine, creating an integrated pathway where token holders can simultaneously participate in staking rewards and governance. ^[52]

Users can "supply SKY tokens to the Staking Engine of the Sky Protocol to create positions that will enable them to generate and borrow USDS against their supplied SKY, transfer voting power to a delegate or a contract that they own, and access Staking Rewards." ^[52]

This integrated approach addresses a long-standing challenge in MakerDAO governance: the choice between locking tokens for governance participation versus deploying them for yield generation. Historically, MKR holders choosing to vote had to forgo staking rewards, while those choosing staking gave up governance participation. This created a trade-off that reduced governance participation as yield-focused holders opted out of voting.

By enabling simultaneous staking and delegation, the Staking Engine alignment removes this trade-off. Token holders can earn staking rewards while delegating voting power to an AD, maintaining both economic productivity and governance influence. This should theoretically increase total governance participation by removing the opportunity cost that previously deterred staking-focused holders from voting.

The delegation-through-staking mechanism also creates interesting dynamics for ADs. Delegates may now attract delegation not only through governance quality but also by educating token holders about the ability to maintain staking returns while delegating. ADs who effectively communicate this zero-trade-off option may attract delegation from holders who previously avoided governance entirely.

Choosing a Delegate

Token holders selecting which AD to delegate to face several considerations beyond the simple mechanical process of executing delegation.

First, delegators should evaluate AD voting records and communication history to assess alignment with their own values and preferences. The on-chain voting record shows how each AD has voted on historical proposals, while forum communication threads explain the rationale behind those votes. ^[4] A token holder can review months of AD voting and communication to determine which delegate most consistently represents their perspective.

Second, delegators might consider AD tier and delegation levels as signals of broader community trust. Delegates who have attracted sufficient delegation to reach Level 1 or Level 2 Ranked status have presumably earned substantial community confidence through demonstrated governance quality. However, this creates a bandwagon effect where popular delegates become more popular simply because others delegate to them, potentially overlooking newer delegates who might offer superior governance but haven't yet built delegation mass.

Third, delegators should consider diversification and decentralization implications. If one or two ADs control the majority of delegated voting power, incremental delegation to those already-dominant delegates further centralizes governance. Delegators concerned about decentralization might intentionally choose less-popular delegates to distribute voting power more evenly, even if they believe the dominant delegates are slightly higher quality.

Fourth, delegators might evaluate AD communication style and accessibility. Some ADs provide extensive technical analysis with detailed parameter discussions, while others offer higher-level strategic commentary. Delegators should choose ADs whose communication approach matches their preferred level of detail and complexity.

The Current Aligned Delegates list in the Atlas provides essential starting information for this evaluation, including forum thread links where delegators can review each AD's communication history and voting explanations. ^[4]

Changing or Revoking Delegation

Delegators can change their delegation at any time, switching from one AD to another or revoking delegation entirely to vote directly themselves. This flexibility ensures delegation remains consensual and responsive—if an AD's governance approach diverges from their delegators' preferences, those delegators can withdraw support.

The Chief V3 system enables delegation changes without needing to first unlock SKY and then re-lock to a new delegate. Instead, delegators can directly update their delegation assignment, with the change taking effect immediately for future votes. This reduces friction and gas costs compared to systems requiring full unlocking and re-locking cycles.

However, delegation changes face the Governance Security Module (GSM) delay consideration. If an executive vote is already in progress and nearing passage threshold, delegation changes won't affect that specific vote's outcome if the vote concludes before the delegation change applies. This prevents last-minute delegation manipulation where actors rush to change delegation specifically to influence an imminent vote outcome.

The ability to freely change delegation creates accountability pressure for ADs. Delegates who provide poor governance quality or demonstrate misalignment risk losing delegation to competitors, reducing their voting influence and potentially dropping them below Ranked Delegate thresholds where they lose compensation eligibility. This market-based accountability complements protocol-level enforcement mechanisms.

AD Enforcement and Derecognition

The Sky Atlas establishes comprehensive enforcement mechanisms to ensure Aligned Delegates comply with their obligations and to remove delegates who demonstrate misalignment or compromise. These mechanisms balance the need for strict accountability with procedural fairness and protection against arbitrary enforcement.

Core Facilitator Enforcement Mandate

The Core Facilitator "must enforce all rules governing Aligned Delegates," creating a positive obligation rather than discretionary authority. ^[50] This mandatory enforcement language prevents situations where known violations go unaddressed due to reluctance, neglect, or favoritism—the Core Facilitator cannot decline to act when presented with clear evidence of AD rule violations.

The enforcement mandate covers all AD rules including participation thresholds, communication requirements, operational security standards, kickback prohibitions, and alignment obligations. Any verified violation triggers Core Facilitator enforcement responsibility, whether discovered through the Core Facilitator's own monitoring, reported by community members, or flagged by other facilitators.

Misalignment Investigation and Adjudication

When potential AD misalignment is suspected, the Atlas establishes specific investigation and adjudication procedures. "Any community member or Aligned Delegate with information pertinent to suspected Alignment Conserver misalignment may take their concerns directly to the Core Facilitator." ^[53]

Upon receiving such information, "the Core Facilitator must promptly conduct an initial review to quickly assess the credibility of the concern." ^[53] This preliminary assessment serves as a filter against frivolous or obviously unfounded allegations while ensuring credible concerns receive full investigation. The Core Facilitator must "decide whether to initiate a formal adjudication process" based on this preliminary review. ^[53]

If the Core Facilitator determines the allegation merits formal investigation, they initiate the adjudication process defined in Section A.1.4.9 of the Atlas (covering Alignment Conserver adjudication generally). ^[53] This formal process presumably includes procedures for evidence gathering, providing the accused AD with notice and opportunity to respond, evaluating evidence, and reaching a determination about whether misalignment occurred.

The Atlas includes a special provision for allegations concerning the Core Facilitator themselves: "Where the allegation of misalignment concerns the Core Facilitator, a community member can take their concerns to Core GovOps, who is then empowered to initiate the formal adjudication process." ^[53] This alternative pathway prevents situations where the Core Facilitator's conflict of interest blocks investigation of their own potential misalignment.

Operational Security Compromise and Derecognition

Operational security breaches trigger particularly swift enforcement given the risks compromised ADs pose to the ecosystem. "All Facilitators must act swiftly to investigate ADs who are suspected of breaching their requirements regarding operational security and privacy." ^[54]

"Any Scope Facilitator has the authority to formally raise an allegation concerning AD breach of operational security with the Core Facilitator, which then obligates the latter to initiate a formal adjudication" through the standard process. ^[54] This broad authority recognizes that security compromises might be detected by facilitators working in various scopes who notice suspicious AD behavior or credible security breach reports.

The Atlas mandates prompt derecognition where security compromise is clear: "If there is clear evidence or significant suspicion that the operational security of an AD has been compromised, or that they have failed to follow best practice or otherwise made operational security errors, the Core Facilitator must promptly derecognize the AD." ^[54]

This provision establishes a lower evidentiary threshold for security-based derecognition than other misalignment cases—"significant suspicion" suffices rather than requiring definitive proof. The lower threshold reflects the precautionary principle applied to security: the potential harm from allowing a compromised AD to continue operating exceeds the harm of mistakenly derecognizing a legitimate AD, especially given that genuine ADs can reapply for recognition after addressing security concerns.

The requirement that facilitators "must err on the side of caution" when evaluating potential security compromises reinforces this precautionary approach. ^[55] In close cases where evidence is ambiguous, facilitators should choose derecognition over continued AD operation, protecting the ecosystem even if this occasionally results in false positives.

Financial Penalties and Buffer Deductions

For misalignment that warrants financial penalties short of full derecognition, "penalties may be deducted from the AD's Buffer" if the Core Facilitator determines such penalties are appropriate. ^[42] This mechanism provides graduated enforcement—minor violations can result in financial penalties proportional to severity without requiring the nuclear option of full derecognition.

Buffer deductions serve several enforcement purposes. First, they create direct financial consequences for misalignment, ensuring violations carry meaningful costs rather than merely theoretical disapproval. Second, they provide restitution or compensation for harm caused by the misalignment, with deducted amounts returning to the protocol rather than remaining with the violating AD. Third, they create deterrence through credible threat—ADs know that misalignment will result in measurable financial loss, not merely warnings or abstract sanctions.

The deduction mechanism also simplifies enforcement logistics. Rather than attempting to claw back already-distributed compensation or pursuing complex recovery processes, penalties can simply reduce future payouts from accumulated buffer balances. This administrative simplicity ensures penalties can be applied promptly and reliably rather than getting mired in procedural complexity.

Performance-Based Budget Reduction and Rank Loss

Beyond explicit penalties for misalignment, the Atlas establishes automatic budget reduction and potential rank loss for ADs failing to meet performance thresholds. These mechanisms operate somewhat mechanically based on measurable metrics rather than requiring subjective Core Facilitator judgment about misconduct.

As discussed previously, voting-activity and voting-communication metrics below 95% trigger proportional budget reductions, with complete elimination at 75%. ^[29][30] These reductions apply automatically based on tracked participation metrics, creating objective, predictable consequences for insufficient engagement.

For Level 3 Ranked Delegates, dropping below the 75% threshold on either metric triggers not only budget elimination but rank transfer: "their RD rank, and the budget eligibility associated with that rank, is transferred to the next highest-ranking AD, as determined by total amount of SKY delegated to their Delegate Contract." ^[29][30]

This automatic rank transfer creates competitive accountability. An underperforming Level 3 delegate doesn't simply lose compensation while retaining their ranked status—they lose the ranked position entirely, which transfers to the next highest-delegation AD. This ensures ranked positions go to delegates who both attract delegation and maintain participation, rather than allowing delegates to coast on historical delegation while reducing effort.

Emergency Contact Failure and Swift Action Requirements

The Atlas establishes expectations for rapid AD response during emergencies, stating that "swift action is required from Facilitators" to address operational security concerns or other urgent matters. ^[54] While specific emergency response timelines aren't detailed in the Atlas excerpts reviewed, the "swift action" language creates expectations that ADs will respond promptly to emergency communications rather than ignoring urgent coordination requests.

Facilitators are mandated to "maintain high-level operational security" themselves and to ensure AD operational security standards are upheld. ^[23] An AD who consistently fails to respond to emergency contact attempts or demonstrates systematic unavailability during crisis periods could be deemed in violation of operational security requirements, as their unavailability creates governance vulnerabilities even if they haven't experienced technical security compromise.

The emergency contact mechanism's importance means AD failure to maintain reliable emergency communication channels could constitute a serious violation warranting derecognition, particularly if such failure occurs during an actual emergency requiring rapid AD coordination.

Aligned Voter Committees and Alternative Governance Participation

While Aligned Delegates represent the primary delegation pathway within Sky Protocol, they exist alongside Aligned Voter Committees (AVCs) as complementary governance participation mechanisms. Understanding the AD/AVC relationship provides context for the broader governance ecosystem and the options available to token holders seeking active engagement.

Aligned Voter Committee Structure

Aligned Voter Committees are "groups of voters with aligned values and views that engage in the important high-level questions of Maker Governance." ^[56] Every AVC must include an Alignment Conserver who has pledged to support the Atlas, ensuring baseline alignment. ^[56]

The objective of AVCs is to "ensure that they represent MKR voters that are aligned with the values of that AVC," with "members of AVCs compensated for their engagement under certain conditions, thereby incentivizing active governance." ^[56] This compensation structure parallels AD compensation but applies to committee participation rather than individual delegation.

AVCs work "together with Aligned Delegates and Advisory Councils to implement specific governance changes," creating a collaborative governance structure where committees, delegates, and councils coordinate on complex proposals. ^[56] This collaboration model distributes governance workload while enabling specialization—AVCs might focus on particular domains or issue areas while ADs maintain broader governance oversight.

AVC Evolution and Voter Apathy Response

The development of AVCs emerged from concerns about persistent voter apathy in MakerDAO and broader DAO governance. "Due to voter apathy within MakerDAO governance and DAOs more broadly, the DAO will transition from a model of recognized delegates to two groups consisting of aligned voter committees, and aligned delegates." ^[56]

This transition reflects recognition that pure delegation models, while addressing some participation challenges, don't fully solve voter apathy or create sufficiently diverse governance engagement. By establishing both ADs (professional individual delegates) and AVCs (organized voter groups), the Sky ecosystem attempts to create multiple pathways for governance participation that appeal to different participant types.

Some token holders might prefer delegating to a single trusted individual (AD pathway), while others might prefer participating in a committee where they contribute to collective decisions (AVC pathway). The dual structure accommodates both preferences rather than forcing all participants into a single participation mode.

AVC Compensation and Participation Rewards

Historical executive votes show AVC member compensation alongside AD compensation. For example, "AVC Member Participation Rewards for Q2 2024 totalling 100.08 MKR were distributed" through an executive vote in June 2024. ^[57] This compensation demonstrates that AVCs represent substantive governance participation opportunities rather than merely symbolic or advisory roles.

The quarterly distribution pattern for AVC rewards (compared to monthly AD compensation cycles) suggests different operational rhythms for the two participation models. AVCs might operate through longer planning and deliberation cycles aligned with quarterly assessment periods, whereas ADs participate continuously in weekly and bi-weekly governance votes.

The compensation levels—100.08 MKR distributed across presumably multiple AVC members for a quarter—suggest AVC participation is less lucrative than Ranked Delegate positions on a per-participant basis. This differential likely reflects the different roles: ADs provide continuous, comprehensive governance oversight across all proposals, while AVC members might focus on specific domains or participate less intensively.

Phase Three Endgame and AI Governance Tools

AVCs feature prominently in the Sky Protocol Endgame Plan's Phase Three, which "will enable tokenholders to access governance and AI tools to make more informed governance decisions." ^[58] The integration of AI governance tools with AVC participation suggests a vision where committees leverage technical analysis and decision-support systems to enhance their governance quality.

This AI integration could address some limitations of human governance participation, such as difficulty analyzing complex technical proposals, challenges tracking long-term governance patterns, or cognitive biases affecting decision quality. If AVCs can access AI tools that summarize complex proposals, flag potential risks, or highlight relevant historical precedents, their governance quality might exceed what individual delegates achieve through purely human analysis.

The phased rollout approach—introducing AVCs before full AI tooling integration—suggests the ecosystem is building governance infrastructure incrementally rather than attempting a single comprehensive transformation. AVCs operating in Phase Two can establish operational patterns and participation norms that Phase Three AI tools then augment rather than replace.

AD vs. AVC Choice for Token Holders

Token holders seeking governance engagement beyond direct voting face a choice between delegation to ADs and participation in AVCs. Several factors might inform this choice:

ADs offer passive governance participation—token holders delegate and then largely disengage, trusting their chosen AD to vote according to alignment. This minimal-effort approach suits token holders who want governance influence without time investment.

AVCs require active participation—members presumably attend committee meetings, discuss proposals, coordinate positions, and potentially vote collectively. This higher engagement suits token holders willing to invest time in governance but who prefer committee deliberation over individual decision-making.

AD delegation provides individual choice—each token holder independently selects their preferred AD based on personal assessment of alignment and quality. AVC participation involves collective identity—members join a committee representing particular values or perspectives, subordinating individual preferences to committee consensus.

AD voting power is proportional—delegates controlling more delegated voting weight have more governance influence, creating natural hierarchy based on community trust. AVC influence might be more egalitarian—if committees make collective decisions through internal deliberation, each member contributes equally regardless of their individual token holdings.

These different participation modes serve complementary functions in the ecosystem. Token holders can choose the mode matching their available time, preferred engagement level, and governance philosophy, rather than being forced into a one-size-fits-all participation model.

Governance Participation Statistics and Voting Power Distribution

Understanding Aligned Delegate impact on governance requires examining participation patterns, voting power concentration, and the relationship between delegation and direct voting.

Historical Centralization Concerns

Sky Protocol's governance history reveals persistent centralization concerns despite stated decentralization goals. The November 2024 brand governance poll provides a stark illustration: "79.3% of votes supported maintaining the Sky brand, but only approximately 20 unique addresses participated, with four entities controlling roughly 80% of vote share." ^[59][60]

The specific distribution showed extreme concentration:

• Largest entity: 16,856,655 MKR (51.3% of total votes cast) ^[59]
• Second entity: 5,495,126 MKR (16.7%) ^[59]
• Third entity: 2,355,000 MKR (7.2%) ^[59]

This concentration pattern—four entities controlling 80% of voting weight with total participation around 20 addresses—reveals governance that is decentralized in theory but highly centralized in practice. ^[59][60] While any token holder can theoretically vote, actual voting power concentrates among a small number of large holders or delegated positions.

These patterns persist across multiple governance votes, not merely the brand poll. Forum discussions consistently express concerns about "increasing reliance on delegation" and "consolidation among large holders," suggesting the centralization isn't limited to particular votes but reflects systemic governance structure. ^[61]

Delegation's Impact on Participation

The Recognized Delegate and subsequent Aligned Delegate programs demonstrably increased consistent voter turnout compared to purely direct governance. Under early MakerDAO governance, "voter turnout for early executive votes typically involved only a few dozen unique addresses," with highly variable participation as casual holders voted sporadically. ^[62]

The introduction of compensated delegates created professional participants who vote consistently rather than sporadically. "This professionalization of governance participation increased consistent voter turnout" as delegates maintained near-100% participation to satisfy compensation requirements. ^[63]

However, delegation also "raised concerns about centralizing influence among a small delegate cohort." ^[63] As delegation increased, the number of unique voting addresses declined, suggesting token holders increasingly relied on delegates rather than participating directly. This creates a trade-off: delegation increases total voting power participation (including delegated tokens that might otherwise remain dormant) while decreasing the number of independent decision-makers actually exercising judgment.

Current Delegate Voting Power Share

As of January 2026, specific voting power distribution data among the eleven recognized ADs is not publicly aggregated in easily accessible formats. However, the three-tier Ranked Delegate structure provides some indication:

BLUE and Cloaky holding Level 1 status suggests they control the two largest shares of delegated voting power among all ADs. ^[36] Bonapublica's Level 2 status indicates the third-largest delegation share. ^[38] The eight remaining recognized ADs either hold Level 3 Ranked status or fall below the Level 3 threshold, controlling progressively smaller delegation amounts.

The governance portal at vote.sky.money provides real-time delegation statistics, allowing interested parties to examine current delegation distribution. ^[64] However, delegation patterns shift continuously as token holders adjust their delegation choices, making point-in-time statistics quickly outdated.

Delegate Participation Rates

The 95% participation threshold for full compensation and 75% threshold for elimination create strong incentives for high AD participation rates. ^[29][30] Ranked Delegates who want to maintain full compensation effectively must participate in virtually every vote, missing no more than approximately one vote per month to stay above the 95% baseline.

This structural incentive suggests Ranked Delegates likely maintain near-perfect participation rates, as the financial consequences of non-participation are substantial and immediate. An AD earning 400,000 USDS annually loses 4,000 USDS for each percentage point below 95% participation—significant enough to motivate consistent engagement.

In contrast, unranked ADs receiving no compensation lack this financial incentive for perfect participation. Unranked ADs might participate more sporadically, voting on proposals they consider particularly important or relevant while skipping routine parameter adjustments they view as less significant. This creates a participation quality differential where compensated Ranked Delegates provide comprehensive oversight while uncompensated ADs provide selective engagement.

Direct Voting vs. Delegated Voting Trends

The ability to simultaneously participate in staking and delegation through the Staking Engine potentially shifts the direct/delegated balance. ^[52] Historically, token holders choosing staking yields couldn't participate in governance, creating a structural incentive against governance engagement. With integrated staking-and-delegation, yield-focused holders can maintain economic productivity while delegating voting power, potentially increasing total delegated voting power.

However, this increased delegation might come at the expense of direct voting. If token holders who previously voted directly realize they can delegate while staking and earning yields, they might shift from direct participation to delegation-plus-staking. This would increase total governance participation (as previously inactive staking-focused holders now delegate) while decreasing independent decision-maker count (as previously direct voters switch to delegation).

The net effect on governance quality depends on perspective. Optimists argue higher total participation (even if delegated) improves legitimacy and representation. Pessimists worry that reducing independent decision-makers increases conformity and decreases deliberation quality, as fewer perspectives influence outcomes even if total voting weight participation increases.

Criticism and Challenges

The Aligned Delegate system, while addressing some governance participation challenges, faces substantial criticisms and ongoing challenges that question its effectiveness and alignment with decentralization principles.

Centralization Concerns and Power Concentration

The most fundamental criticism involves governance centralization masked by decentralization rhetoric. The November 2024 brand vote starkly illustrated this concern: four entities controlled approximately 80% of voting power despite theoretically broad token distribution. ^[59][60]

Critics argue that the AD system, rather than mitigating centralization, institutionalizes it by creating professional delegate positions that attract delegation and consolidate voting power. Token holders preferentially delegate to established, well-known ADs rather than distributing delegation broadly, creating winner-take-most dynamics where a small number of top delegates control majority voting power.

This centralization creates several risks. First, collusion becomes easier—coordinating among three Level 1/Level 2 Ranked Delegates is trivial compared to coordinating among thousands of independent token holders. If Ranked Delegates align their voting either explicitly or through implicit coordination, they can effectively determine governance outcomes regardless of broader community preferences.

Second, capture becomes more feasible—corrupting or coercing a small number of high-power delegates is more practical than compromising a distributed community. External actors seeking to influence Sky governance might target top delegates through bribery, threats, or other influence methods, knowing that controlling three delegates provides controlling influence over the protocol.

Third, homogeneity increases—delegates might converge toward similar perspectives through mutual interaction, professional socialization, and shared incentive structures, reducing diversity of viewpoints that broad participation would provide. This echo chamber effect might cause delegates to collectively make similar mistakes or overlook alternatives that a more diverse deliberation would identify.

Compensation Structure Issues

The tiered compensation structure creates its own concerns. The substantial gap between Level 1 (400,000 USDS) and Level 3 (48,000 USDS) creates strong incentives for delegates to maximize delegation attraction through any available means, potentially including methods that prioritize delegation growth over governance quality.

Critics note that compensation levels—particularly the 400,000 USDS Level 1 allocation—might exceed what governance quality actually justifies. While proponents argue this compensation enables professional-quality governance work, skeptics question whether delegate contributions truly provide value exceeding substantial compensation costs, especially given that compensation comes from protocol treasury rather than delegates' own resources.

The performance metrics (95% participation, 95% communication) might incentivize box-checking compliance rather than genuine quality. A delegate can satisfy participation requirements by voting without thoughtful analysis, and can satisfy communication requirements with perfunctory explanations rather than substantive rationales. The metrics measure activity rather than quality, potentially rewarding high-volume mediocrity over selective excellence.

The treasury allocation of "up to 1% of Step 1 Capital" to ADs raises questions about opportunity cost. ^[44] That 1% could alternatively fund protocol development, security audits, user acquisition, or other value-creating activities. Whether AD compensation provides value exceeding alternative uses of those funds remains debatable and difficult to measure objectively.

Anonymity vs. Accountability Tensions

While anonymity protects ADs from external pressure, it also limits accountability mechanisms. If an AD consistently makes poor governance decisions or demonstrates incompetence, delegators can withdraw delegation, but the AD faces no real-world reputational damage or legal consequences. The AD might even reemerge under a new pseudonym, attempting to re-establish themselves without their previous poor performance following them.

This limited accountability creates moral hazard—ADs might take greater risks or exercise less diligence knowing that mistakes carry only protocol-internal consequences, not real-world professional or legal liability. In contrast, publicly identified governance participants face reputational stakes that incentivize caution and diligence beyond what protocol-internal mechanisms alone provide.

Critics also note that anonymity prevents background verification. Token holders cannot verify whether their chosen AD has relevant expertise, professional credentials, or track record in other contexts. They must evaluate ADs purely based on governance communications and voting records within the Sky ecosystem, without ability to assess broader competence or reliability.

Communication Quality and Effectiveness Concerns

The voting-communication requirements attempt to ensure delegate transparency, but actual communication quality varies substantially among ADs. Some delegates provide extensive, thoughtful analysis explaining their reasoning with reference to Atlas principles and proposal specifics. Others provide brief, formulaic explanations that technically satisfy the requirement while offering little genuine insight.

The Atlas's acknowledgment of uncertainty about communication quality criteria reflects this challenge. ^[30] Without clear quality standards, the communication requirement becomes a procedural checkbox rather than a genuine accountability mechanism—ADs can satisfy the letter of the requirement while violating its spirit by providing unhelpful explanations.

Additionally, even high-quality AD communications might not effectively reach delegators. If communications occur through forum threads that most token holders never read, the transparency value is limited. Delegators might delegate without ever actually reviewing their chosen AD's voting explanations, making the communication requirement ineffective at enabling informed delegation decisions.

Competitive Dynamics and Delegation Capture

The tiered Ranked Delegate structure creates competitive dynamics where ADs attempt to maximize delegation to reach higher compensation tiers. While competition might incentivize quality, it might also incentivize delegation capture strategies that prioritize delegation growth over governance quality.

For example, ADs might focus communications on popular positions that attract delegation rather than unpopular but correct positions that might cost delegation. An AD recognizing that a particular governance decision is correct but unpopular might vote the popular position to maintain delegation rather than risk losing delegation by voting correctly.

ADs might also specialize in cultivating relationships with large token holders who can provide substantial delegation, rather than appealing to broader community values. This creates patron-client dynamics where ADs primarily serve the interests of major delegators who provide most of their voting power, rather than representing broader ecosystem interests.

The Level 3 rank transfer mechanism creates additional concerning dynamics. If the lowest-ranked Level 3 delegate is constantly at risk of being displaced by a rising AD, they might focus excessive attention on delegation retention rather than governance quality, prioritizing activities that maintain delegation over activities that provide better governance outcomes.

Kickback Prohibition Enforcement Challenges

While the Atlas prohibits kickbacks, enforcement faces significant challenges given AD anonymity and cryptocurrency's pseudonymous nature. An AD could potentially provide hidden kickbacks through various mechanisms:

• Operating an associated staking service that offers preferential rates to delegators
• Providing governance information or analysis privately to major delegators before sharing publicly
• Offering delegation kickbacks through circuitous routing that obscures direct connections
• Coordinating with external parties who compensate delegators indirectly

Detecting such hidden kickbacks requires extensive investigation and monitoring that may exceed Core Facilitator capacity or violate anonymity protections. If ADs structure kickback arrangements carefully, enforcement might prove practically impossible even if violations technically occur.

This enforcement challenge means the kickback prohibition might function more as an honor system than a strictly enforced rule, relying on AD integrity rather than effective detection and punishment. Critics question whether honor-system arrangements provide sufficient protection against gaming behavior in financial systems where substantial compensation is at stake.

Related Governance Mechanisms

Aligned Delegates operate within a broader governance ecosystem that includes several complementary mechanisms and entities that shape how protocol decisions are made and implemented.

Core Facilitator Role

The Core Facilitator serves as the primary administrator and enforcer for the AD framework, responsible for recognition, compensation calculation, performance monitoring, and enforcement. ^[50] This centralized administrative role creates both efficiency and single-point-of-failure concerns.

On the efficiency side, having a single designated facilitator responsible for AD administration ensures consistent standards, timely compensation processing, and clear accountability for enforcement. Distributed responsibility might create coordination failures where tasks fall between cracks or inconsistent standards emerge as different parties apply rules differently.

However, centralization in the Core Facilitator role creates risks. The facilitator wields substantial discretionary power in evaluating AD applications, assessing performance metrics, investigating misalignment allegations, and determining penalties. If the Core Facilitator is captured, incompetent, or malicious, the entire AD framework could be compromised.

The Atlas includes a provision for addressing Core Facilitator misconduct—allegations against the Core Facilitator can be raised with Core GovOps, who can initiate adjudication. ^[53] However, this fallback mechanism itself depends on Core GovOps integrity and willingness to act against a fellow facilitator, which might be compromised by professional relationships or institutional loyalty.

Executive Vote and Governance Poll Processes

ADs participate in two distinct governance mechanisms: Executive Votes that enact binding protocol changes, and Governance Polls that signal community sentiment before implementation. ^[65]

Executive Votes use continuous approval voting where competing proposals can be introduced at any time, with the executive holding the most voting weight becoming the active "hat" controlling protocol contracts. ^[66] This means AD votes don't merely approve or reject isolated proposals but rather establish an ongoing equilibrium where current protocol state must be actively defended against competing alternatives.

Governance Polls provide signal votes indicating community preferences before changes proceed to executive implementation. ^[65] These polls allow ADs and other voters to express views on proposals without immediately enacting changes, enabling deliberation and refinement before binding votes occur.

The two-stage architecture creates opportunities for AD influence at multiple points. ADs can signal opposition to proposals during the poll phase, potentially preventing problematic changes from reaching executive votes. They can vote against executive implementations of changes that passed polls but were modified in concerning ways. And they can coordinate with other governance actors to introduce alternative executive proposals if existing options are all problematic.

Governance Security Module (GSM)

The Governance Security Module implements a time delay between when an executive vote passes and when its changes activate on-chain, providing a window to detect malicious proposals and trigger emergency shutdown if necessary. ^[67]

The GSM creates an interesting dynamic for AD voting. ADs voting for a proposal can't immediately implement changes—there's always a delay period during which the broader community can review the passed executive and potentially oppose it if they discover problems the ADs missed or approve malicious changes.

This delay provides a safety net against AD failure, whether through incompetence, compromise, or malicious coordination. Even if ADs collectively vote for a harmful proposal, the GSM delay enables community intervention before harm occurs. This reduces the consequences of AD mistakes while potentially reducing AD caution—knowing that errors can be caught during the GSM delay might cause ADs to exercise less diligence than if their votes had immediate irreversible effects.

Emergency Response and Protego Mechanisms

The Atlas defines emergency response mechanisms including emergency spells and the Protego process for rapidly deploying protocol changes during crisis situations. ^[68] ADs play specific roles in these emergency processes, with responsibilities for validating emergency changes and potentially opposing unvalidated emergency deployments.

The emergency spell framework recognizes that normal governance processes—including AD deliberation and voting—might be too slow during crisis situations requiring immediate response. By establishing pre-authorized emergency procedures, the protocol can respond rapidly while maintaining governance oversight through AD involvement in validation and approval.

However, emergency mechanisms also create governance attack vectors. If emergency procedures allow bypassing normal deliberation and AD voting, attackers might falsely characterize non-emergency situations as emergencies to rush through changes without proper oversight. The Atlas attempts to address this risk by requiring AD involvement in emergency validation, but the tension between speed and oversight remains inherent.

Sky Forum Deliberation

The Sky Forum serves as the mandatory venue for pre-vote deliberation, establishing the off-chain discussion pipeline that feeds into governance polls and executive votes. ^[69] ADs participate actively in forum discussions, both explaining their own positions and engaging with community feedback.

Forum deliberation provides several governance functions. It enables proposal refinement before votes occur, allows concerns to be raised and addressed before implementation, creates public records of governance reasoning that can inform future decisions, and provides transparency enabling the broader community to understand decisions even if they don't participate directly in voting.

However, forum deliberation also creates information asymmetry—governance quality depends partly on how thoroughly participants read and understand forum discussions. ADs who diligently read entire threads and engage with all substantive arguments might make more informed decisions than ADs who skim discussions or rely on executive summaries. This creates potential quality variation among ADs that performance metrics like participation rates don't capture.

Data Freshness and Temporal Considerations

The information presented in this article reflects Sky Protocol governance as of January 11, 2026, but the dynamic nature of the AD system means specific details become outdated as governance evolves.

Dynamic Elements Requiring Regular Updates

Several article elements have short temporal validity:

Current Aligned Delegates: The list of eleven recognized ADs represents a point-in-time snapshot. ^[4] New ADs may achieve recognition through the application process, while existing ADs may be derecognized for misalignment or voluntarily withdraw. The current recognized delegate list should be verified through the official Atlas documentation or governance portal rather than relying on this article's January 2026 snapshot.

Ranked Delegate Tiers: The specific assignments of BLUE and Cloaky as Level 1, Bonapublica as Level 2, and other delegates at Level 3 or unranked status reflect delegation patterns at the reference point. ^[36][38] Delegation shifts continuously as token holders adjust their delegation choices, potentially causing tier changes as ADs gain or lose voting power relative to each other.

Compensation Amounts: The specific budget allocations (400,000 USDS for Level 1, 175,000 USDS for Level 2, 48,000 USDS for Level 3) are defined in the Atlas but could change through governance votes that modify compensation structures. ^[35][37][39] Additionally, actual compensation received by individual ADs varies based on performance metrics and buffer accumulation timing.

Executive Vote Details: References to specific historical executive votes (such as the November 2024 brand vote or specific AD compensation distributions) remain accurate as historical facts but don't reflect current governance state. ^[59][60] Current governance priorities, active proposals, and recent voting patterns require consulting real-time governance portals.

Semi-Static Elements with Medium-Term Validity

Other article elements change less frequently:

Atlas Framework Requirements: The core AD requirements (anonymity, operational security, kickback prohibitions, participation thresholds) are embedded in the Sky Atlas documentation and change only through formal Atlas Edit proposals that require extensive governance process. ^{[2][9][23][29][30]} These elements likely remain valid for months or years absent specific governance votes to modify them.

Recognition Process: The basic application and recognition procedures for becoming an AD are unlikely to change frequently, as they represent foundational governance infrastructure. ^[34] However, specific implementation details or additional requirements might be added over time as the ecosystem identifies process improvements or addresses emerging concerns.

Ranked Delegate Structure: The three-tier system with distinct compensation levels for Level 1, 2, and 3 represents a deliberate architecture embedded in the Atlas. While specific compensation amounts might change, the tiered structure itself likely persists unless governance undertakes comprehensive AD framework restructuring.

Recommended Update Frequency

To maintain accuracy, articles about Aligned Delegates should be reviewed quarterly to update:

• Current recognized delegate list and ranked delegate tier assignments
• Recent executive votes demonstrating AD compensation distributions or governance patterns
• Any Atlas Edit proposals that modified AD requirements or compensation structures
• Governance participation statistics and voting power distribution data
• Emerging criticisms or challenges based on recent governance experiences

Annual comprehensive updates should reassess:

• Fundamental AD framework effectiveness based on accumulated governance experience
• Evolution of delegation patterns and their impact on governance centralization
• Comparison between AD governance outcomes and alternative governance models
• Long-term trends in governance participation, both delegate and direct
• Relationship between AD framework and broader Endgame Plan implementation

Temporal Category Classification

This article is classified as "dynamic" in temporal category, reflecting that while core AD framework elements remain relatively stable, specific implementation details, current participants, and performance data change frequently enough to require regular updates for maintained accuracy.

The dynamic classification means readers should verify time-sensitive information through authoritative real-time sources:

• Current recognized ADs and ranked tiers: Official Atlas documentation or vote.sky.money governance portal
• Recent AD compensation distributions: Executive vote history at vote.makerdao.com or vote.sky.money
• Active governance discussions: forum.sky.money threads and recent posts
• Delegation statistics and voting power distribution: Governance portal analytics and on-chain data

Sources

1. Sky Atlas: A.1.5 - Aligned Delegates — Official Sky Atlas documentation defining Aligned Delegates and their role in Sky Protocol governance
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3. Protocol Participants | Sky Protocol Docs — Developer documentation on Sky governance participants including delegates
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5. Sky Atlas: A.1.5.3 - Ranked Delegates — Definition of Ranked Delegates eligible for protocol budget
6. Maker Governance Executive Vote - Aligned Delegate Compensation December 2024 — Executive vote distributing 25,402 USDS to seven Aligned Delegates for December 2024
7. Sky Atlas: A.1.5.4 - Kickbacks Prohibited — Atlas section prohibiting ADs from providing compensation kickbacks to delegators
8. Sky Atlas: A.1.5.6 - Mandate to Maintain High Level of Operational Security — Operational security requirements for Aligned Delegates
9. Sky Atlas: A.1.5.4 - Kickbacks Prohibited — Prohibition on ADs providing kickbacks from compensation
10. MIP61: Recognized Delegate Compensation - Sky Forum — Original MakerDAO Improvement Proposal establishing Recognized Delegate compensation framework
11. Maker Governance Executive Vote - Recognized Delegate Compensation January 2023 — Executive vote distributing 108,690 DAI to eighteen Recognized Delegates
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13. Governance and Delegation - Sky Forum — Forum discussion on governance and delegation frameworks
14. MakerDAO MKR Holder Delegation Guide — MakerDAO governance manual section on delegation including Shadow Delegates
15. Maker Governance Executive Vote - Recognized Delegate Compensation September 2022 — Executive vote from MIP61 Recognized Delegate program
16. Maker Governance Executive Vote - Recognized Delegate Compensation March 2022 — Executive vote distributing 57,665 DAI to eight Recognized Delegates
17. Maker Governance Executive Vote - Recognized Delegate Compensation July 2022 — Executive vote distributing 85,185 DAI to 14 Recognized Delegates
18. Maker Governance Executive Vote - Recognized Delegate Compensation September 2022 — Executive vote distributing 117,445 DAI to sixteen Recognized Delegates
19. Maker Governance Executive Vote - Recognized Delegate Compensation January 2023 — Executive vote distributing 108,690 DAI compensation
20. Delegate Debates #1 Delegate Compensation - Sky Forum — Forum discussion on delegate compensation and centralization concerns
21. Overview - Maker Endgame Documentation — Official Endgame Plan documentation outlining Sky Protocol transition
22. Sky Fusion - Sky Endgame Overview — Sky Fusion dashboard presenting Endgame implementation details
23. Sky Atlas: A.1.5.6 - Operational Security Requirements — Detailed operational security mandates for ADs
24. Maker Governance Executive Vote - Aligned Delegate Compensation May 2024 — Executive vote showing transition-period overlap of compensation frameworks
25. Sky Fusion - Aligned Delegates' Budget Statements — Dashboard tracking AD compensation and budget statements
26. Sky Atlas: Alignment Conservers — Atlas section defining Alignment Conservers as category including ADs
27. Sky Atlas: A.1.5.1.3.1.0.3.1 - Delegate Contract Element Annotation — Technical definition of Delegate Contract smart contracts
28. Sky Atlas: A.1.5.3.3.1 - Voting-Activity Metrics — Performance metrics for AD voting participation
29. Sky Atlas: A.1.5.3.3.1 - Voting-Activity Metrics — Detailed voting participation thresholds and budget modification formulas
30. Sky Atlas: A.1.5.3.3.2 - Voting-Communication Metrics — Communication requirements and performance-based budget adjustments
31. Atlas - Maker Endgame Documentation — Overview of Sky Atlas structure and organization
32. Sky Atlas: A.1.5.9 - Emergency Contact Mechanism — Emergency communication requirements for ADs
33. Sky Atlas: A.1.5.3 - Ranked Delegates Definition — Core definition of Ranked Delegate concept
34. Sky Atlas: A.1.5.1.3 - AD Recognition Process — Formal recognition process for becoming an Aligned Delegate
35. Sky Atlas: A.1.5.3.1.1.2 - Budget for Level 1 Ranked Delegates — Level 1 budget specification of 400,000 USDS annually
36. Sky Atlas: A.1.5.3.1.1.3.1 - Current Level 1 Ranked Delegates — Official designation of BLUE and Cloaky as Level 1 delegates
37. Sky Atlas: A.1.5.3.1.2.2 - Budget for Level 2 Ranked Delegates — Level 2 budget specification of 175,000 USDS annually
38. Sky Atlas: A.1.5.3.1.2.3.1 - Current Level 2 Ranked Delegates — Official designation of Bonapublica as Level 2 delegate
39. Sky Atlas: A.1.5.3.1.3.2 - Budget for Level 3 Ranked Delegates — Level 3 budget specification of 48,000 USDS annually
40. Sky Atlas: A.1.5.3.1.3.3 - Selection of Level 3 Ranked Delegates — Dynamic selection mechanism for Level 3 delegates based on voting power
41. Sky Atlas: A.1.5.3.4 - AD Buffer — AD Buffer accumulation and payout mechanisms
42. Sky Atlas: A.1.5.3.4.3 - Deduction of Penalties from AD Buffer — Penalty deduction procedures for misaligned acts
43. Sky Atlas: A.1.5.3.4.1 - AD Monthly Compensation Cycle — Monthly calculation and distribution process for AD compensation
44. Sky Atlas: A.2.4.1.2.2.3 - Aligned Delegates Treasury Allocation — Treasury allocation of up to 1% of Step 1 Capital to ADs
45. Sky Atlas: A.2.4.1.4.1.2.1 - Aligned Delegates Buffer Multisig — Dedicated multisig for AD compensation management
46. Sky Atlas: A.1.5.1.3.1 - Contract Deployment — Delegate Contract deployment requirements and procedures
47. Sky Atlas: A.1.5.1.3.2 - Submission Message — Verification message requirements for AD recognition
48. Sky Atlas: A.1.5.1.3.2.1 - Cryptographically Signed Message by Ethereum Address — Ethereum address verification through cryptographic signature
49. Sky Atlas: A.1.5.1.3.2.2 - Cryptographically Signed Message by Ecosystem Actor — Ecosystem actor verification requirements
50. Sky Atlas: A.1.5.1.1 - Mandate to Enforce Rules — Core Facilitator obligation to enforce AD rules
51. Protocol Participants - Vote Delegate V3 | Sky Protocol Docs — Technical documentation on Chief V3 and Vote Delegate V3 contracts
52. Sky Protocol Staking and Governance | CoinMetro — Overview of integrated staking and governance delegation
53. Sky Atlas: A.1.5.5.0.4.1 - Facilitators' Authority to Raise Formal Allegation — Misalignment investigation and adjudication procedures
54. Sky Atlas: A.1.5.7 - Derecognition Required Where AD Operational Security Is Compromised — Operational security breach investigation and derecognition mandate
55. Sky Atlas: A.1.5.8 - Facilitators Must Err on Side of Caution — Precautionary principle for security-related enforcement
56. Aligned Delegates | Endgame Documentation — Official Endgame documentation on AVCs and their relationship to ADs
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61. Sky Governance Voting Article - Delegation Trends — Discussion of increasing delegation reliance and consolidation concerns
62. Sky Governance Voting Article - Early Participation — Historical context on early MakerDAO voter turnout patterns
63. Sky Governance Voting Article - Delegate Impact — Analysis of how delegate professionalization affected participation
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65. Sky Governance Voting Article - Governance Processes — Explanation of executive votes and governance polls
66. Sky Governance Voting Article - Continuous Approval Voting — Technical details on continuous approval voting mechanism
67. Sky Governance Voting Article - Governance Security Module — GSM delay mechanism and security functionality
68. Sky Atlas: Emergency Response System — Emergency spell and Protego mechanisms in governance
69. Sky Forum — Official Sky governance forum for pre-vote deliberation