Why this move matters
- Yield flows are trumping price action: Sky's savings vaults crossed $4B in total value locked, underscoring how steady returns can attract capital even during market drawdowns.
- Stablecoin strategy is working: Most deposits favor USDS, reflecting investor preference for the higher payout relative to DAI.
- Signal for DeFi incumbents: The growth puts Sky back in the conversation among the largest protocols by TVL, despite its token still trailing historical highs.
Market snapshot
The SKY token climbed roughly 14% today while many altcoins traded lower, pressured by continued BTC weakness. Even with the pop, SKY remains down about 9% over the past month and has yet to fully bounce back from the broad altcoin liquidation on Oct. 10.
Inside Sky's savings engine
Sky Savings offers a variable yield on USDS and DAI through the Sky Savings Rate (SSR). The vault composition is heavily tilted toward USDS—over 91% of the pool—while DAI contributes around 8%. The skew is easy to understand: SSR currently pays about 4.5% on USDS versus 1.25% on DAI.
Capital has poured in. SSR's TVL expanded roughly 63% over the last month and about 150% since Jan. 1, making it one of 2025's standout gainers among established DeFi protocols.
Rebrand, migration, and the new stablecoin
Sky—formerly MakerDAO—completed its rebrand in August 2024. The transition included migrating MKR to SKY in September and launching the USDS stablecoin. While SKY's market cap still sits below MKR's prior all-time high of $5.5 billion, Sky remains a top-10 DeFi protocol with $6.65 billion in total value locked across the ecosystem.
What's driving the deposits?
- Rate differential: A 4.5% payout on USDS is competitive with off-chain short-duration yields, making it attractive for on-chain treasuries and stablecoin holders seeking low-volatility returns.
- Brand credibility: As the successor to one of DeFi's oldest credit protocols, Sky benefits from deep integrations, a long operating history, and recognizable product design (SSR as the spiritual successor to DSR).
- Stablecoin strategy: Concentration in USDS suggests Sky's new unit of account is gaining traction, aided by incentives and the higher quoted rate.
Broader context: DeFi's flight to real yields
In a market where many speculative tokens have struggled to find bids, cash-like yields are in vogue. Protocols tied to real-world assets and short-term rates have seen consistent inflows as investors prioritize predictable income. Sky's momentum underscores a broader rotation: less leverage, more stablecoin carry.
Risks and watch factors
- Rate sensitivity: SSR is variable. A shift in the underlying yield environment could alter payouts and test deposit stickiness.
- Concentration risk: With more than 91% of the vault in USDS, Sky's savings growth is tightly coupled to adoption and confidence in its own stablecoin.
- Market beta: Today's decoupling from broader weakness may not persist if risk assets face deeper drawdowns. Note SKY's still-negative 30-day performance since the Oct. 10 selloff.
Bottom line
Sky's savings product just cleared a major milestone at $4B TVL, and the market took notice. If SSR can maintain competitive yields while expanding USDS adoption, Sky has a clear route to defend its top-tier DeFi status—even if the token's recovery lags the vault's rapid growth.