Sky Protocol Reports Record Revenue as USDS Growth Accelerates

Profit after expenses hit $46mn, swinging from a loss a year earlier and covering nearly all of 2025’s full-year profit in just one quarter.

USDS gains ground against giants

Supply of Sky's USDS token grew to $11.7bn, up 68% from a year ago, making it the world’s third-largest stablecoin. Tether’s USDT still leads with roughly $185bn to $189bn, followed by Circle’s USDC at about $77bn to $78bn. Unlike those two, which are issued and backed by traditional companies holding cash or short-term government debt, USDS is fully governed onchain and backed by a mix of crypto assets and real-world investments.

More than $6.5bn of that USDS is now held in a version that pays holders interest – currently around 3.75% a year. That makes it the largest interest-paying stablecoin globally. Institutions and everyday users can swap regular dollars for USDS through major exchanges, including Binance, with no fees or price slippage, then earn yield while keeping full control of their funds.

New approach powers results

This quarter stands out because Sky has shifted to a more diversified business model. The platform now operates through five specialised "agents" – Spark, Grove, Keel, Obex and Skybase – with plans for five more by the end of 2026. These agents invest USDS collateral into mortgages, GPU financing for artificial intelligence, energy projects and other real-world opportunities, generating steady returns that support the interest paid to USDS holders.

One agent incubator alone deployed $1bn across eight new investment partners in the quarter. A separate integration with the Morpho lending platform pulled in more than $200mn from users of USDC and USDT within weeks.

On 14 Mar, Sky’s community governance voted to change how profits are used. Instead of spending most of the money on token buybacks and rewards, the protocol is building a $150mn financial safety net. Reserves currently stand at $51mn. 

NYSE-listed Stablecoin Development Corporation (SDEV) has become one of the largest holders of Sky’s governance token (SKY), owning 9.2% after a $134mn investment backed by Tether and Framework Ventures.

"USDS supply, sUSDS deposits, and the diversification of where that capital is being deployed are all moving in the same direction. The allocators we talk to are asking better questions than they used to. They want to understand what's behind the yield, not just what the yield is and can they underwrite it. That's a real shift," John Conneely, Sky's head of business development, told Sandmark.

Ambitious plans for 2026

Sky kept its full-year guidance unchanged, targeting roughly $611mn in gross revenue. It expects the safety-net reserve to reach about $75mn by the end of the second quarter. The team is also exploring a new product that would let users lock up USDS for a fixed interest rate over a set period, which could open the door to even longer-term investments.

The protocol has operated for nearly a decade without a major security breach and holds an S&P credit rating (B- with a stable outlook), a rare credential in decentralized finance.