Key Points:
- SKY overtakes BTC, ETH & SOL with +60% YTD.
- sUSDS becomes 2nd largest yield stablecoin.
- Profits stabilized, but TVL slumped.
Sky (SKY) leads the crypto performance sector with a +49.04% gain year-to-date, outperforming Ethereum (+33%), Bitcoin (+28%), and Solana (+19%). The divergence highlights strong market momentum as aggressive buybacks and growing stablecoin demand largely drive Spark (part of the Sky ecosystem).
SKY (formerly MakerDAO) is a DeFi project that lets people earn passive income by holding its stablecoin, $sUSDS, and is becoming a major player in the growing yield-earning stablecoin market.
This chart shows that sUSDS (yellow) has grown rapidly since late 2024 and is now the second-largest yield-bearing stablecoin (YBS) after sUSDe (purple), which is issued by Ethena. While sUSDe dominates the chart, sUSDS has steadily gained market share, highlighting its rising adoption and positioning SKY as a strong contender in the YBS space.
Token Buybacks, Profits & TVL
As reported by Milk Road, Sky has been aggressively buying back tokens. Approximately 8 million $SKY tokens daily since February 24, injecting around $600,000 in buy pressure daily, a move that has supported price growth while reducing circulating supply. At the time of reporting, over 982 million SKY tokens have been repurchased, around $88.07 million. At the same time, Milk Road also noted that Sky’s $sUSDS yield dropped from 8.75% to 4.5%, yet the protocol saw just a 9% outflow (excluding Ethena), highlighting that users continue to trust the protocol despite the lower returns.
As of June 17, 2025, USDS annual profits are estimated at $99.28 million. The sharp decline in February can be attributed to a reduction in yields, which reduced user incentives. Additionally, a significant $1.1 billion withdrawal by Ethena contributed to the downturn. However, profits have since stabilized, indicating steady performance despite earlier headwinds.
The total value locked (TVL) since the beginning of 2025, has dropped from $9 billion in February to around $4 billion by mid-June. The decline suggests waning user participation or capital outflows from the ecosystem, likely driven by falling yields, market uncertainty, or major protocol redemptions like Ethena’s exit.
The Spark That Ignited SKY’s DeFi Engine
Spark is a lending protocol within the Sky (formerly MakerDAO) ecosystem. It allows users to deposit assets and borrow against them, similar to other DeFi lending platforms like Aave.
Spark generates 78.6% of Sky’s annualized revenue, making it the protocol’s primary income driver and core engine of its stablecoin ecosystem.
Spark’s 64.5% share in Sky’s debt distribution signals growing reliance on its lending arm, but this concentration also introduces systemic risk if Spark underperforms or faces liquidity stress.
Strategic Accumulation Underway?
Whale transactions have surged even as fund holdings declined, while top addresses steadily accumulated Sky tokens, signaling redistribution from institutions to large individual holders, perhaps indicating strategic long-term positioning.
Conclusion
Sky has shown notable growth in 2025, driven by buybacks and stablecoin adoption. However, declining TVL and reduced yields suggest the protocol faces ongoing challenges amid changing market dynamics.
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