how to make a cloud effect on sky in 3d?

If you’re world size is relativelly small, then I see no problem with using a particle system. For my game Lost Inferno, I used a particle system for the dust that rolls across the island and it worked pretty well. I’m sure there’s some performance considerations to take into account, but I didn’t notice any dramatic drops in performance with adding a particle system.

You could use a shader too, especially if you world is too big to use particle systems. I have no idea on how to go about it though, sorry.

Another thought: if you have a big world and still want to use a particle system, you could have the particle system follow the player (or be attached to the player) and set the particle emission settings to use world coordinates. You would never get clouds that appear from the horizon, but then you can have decent looking clouds no matter where the player goes.