Sky Protocol, a new decentralized stablecoin [Doyeri's DeFi Radar]

Amid the global stablecoin boom, Sky Protocol is gaining attention with its decentralization approach. Sky Protocol is a system that maintains the value of stablecoins using virtual assets as collateral, designed for active use in decentralized finance (DeFi).

According to DeFi Llama, a virtual asset data provider, at 1:45 PM on the 25th, the market capitalization of SkyDollar (USDS) was approximately $4.602 billion (about 6.341 trillion won). Ranking 4th in total stablecoin market cap, its market cap increased by 17.44% over the past week. When combined with the market cap of Dai (DAI), its predecessor, totaling $4.338 billion, the total market cap exceeds $8.9 billion. While smaller compared to Tether USDT ($163.91 billion), it is steadily increasing its market share by emphasizing its differentiated decentralized stablecoin structure.

Sky Protocol is a project rebranded from Maker Protocol last August. Accordingly, Maker DAO ecosystem token MKR was upgraded to Sky (SKY), and stablecoin Dai (DAI) was upgraded to SkyDollar (USDS).

USDS is a decentralized stablecoin issued by Sky Protocol. It is issued with over-collateralization using virtual assets including ETH. It can be upgraded by converting existing Maker DAO's DAI at a one-to-one ratio. Users can directly convert, store, and retrieve coins through smart contracts without a separate central administrator.

Users can benefit from issuing USDS as collateral without selling virtual assets. USDS can be reinvested in DeFi platforms like Curve or Uniswap for additional income. Users can also earn interest by depositing USDS in the Sky Savings Rate (SSR) built by Sky Protocol.

Sky Protocol's revenue is also increasing with the expanded demand for USDS. Cobiz Research's recent report "Rewriting the DeFi Map" noted that "Sky Protocol is the oldest virtual asset-collateralized stablecoin protocol" and "currently records the highest profitability". In the past year, Sky Protocol's revenue based on fees reached approximately $300 million, mostly from stabilization fees charged when users deposit virtual assets and issue USDS. Stabilization fees are a type of interest automatically generated when depositing collateral assets and issuing stablecoins.

Sky Protocol is also advancing real-world asset-based investments. Last month, the independent organization Grove announced a $1 billion investment in Janus Henderson's AAA-rated Collateralized Loan Obligation (CLO) strategy fund (JAAA). JAAA was launched as a blockchain-based tokenized product in collaboration with Centrifuge. The JAAA tokens secured by Grove can be used as collateral or revenue sources in the Sky ecosystem. Users can now directly utilize real-world based revenue structures in DeFi through on-chain asset-based funds.

Rune Christensen, Sky co-founder, emphasized, "Sky is the ecosystem that first introduced RWA to DeFi".

Reporter Do Ye-ri