Sky

**USDS continues strong growth trajectory despite declining yields** The Sky Protocol's USDS stablecoin saw significant adoption in 2025, with supply increasing from $5.3B to $9.2B - a 73% jump. The number of USDS holders grew from 509,000 to 582,000. This growth occurred even as: - The Sky Savings Rate fell from 12.5% to 4% - Overall DeFi rates declined across the market - USDS supply is currently at $9.4B **Key metric**: USDS supply growth is outpacing the broader stablecoin market, according to SFF's Sky Ecosystem Q4 Update and 2026 Outlook report. The decentralized stablecoin allows users to earn rewards through the Sky Savings Rate system, with deposits accepted from USDS, USDC, or USDT with no minimum requirements.

The crypto industry is experiencing a notable shift in tone, with participants emphasizing fundamentals over speculation. **Key Development:** - Industry figures are publicly acknowledging reduced market noise - Greater emphasis on underlying technology and use cases - This marks a departure from previous momentum-driven narratives This sentiment aligns with earlier analyst observations from mid-2025, which noted Bitcoin rallies showing "less frothy momentum-chasing and stronger fundamental underpinnings." The change suggests a maturing market where participants prioritize sustainable growth over short-term gains.

The **Sky Frontier Foundation** has launched **Sky Ecosystem Insights**, a new research-focused platform providing independent analysis of the Sky Protocol ecosystem. **Key Developments:** - First quarterly report released covering Q4 2025 performance and 2026 outlook - Platform will publish quarterly/annual reports, onchain metrics analysis, and scenario-based projections - All analysis based on publicly available information and operates independently - Full report accessible at [insights.skyeco.com](https://insights.skyeco.com/insights/sky-ecosystem-q4-update-and-2026-outlook-summary) **What to Expect:** The new @SkyEcoInsights account will focus on research-style analysis including ecosystem fundamentals, financial metrics, and data-driven projections. The foundation emphasizes these are assumptions-based scenarios, not guarantees. The main @SkyEcosystem account will continue its usual coverage of product launches and ecosystem updates.

A conversation at the New York Stock Exchange examined the current state of digital assets in the United States, with particular focus on institutional adoption of stablecoins. The discussion highlighted a significant market inefficiency: over $300 billion in stablecoins currently sit idle without generating any yield for holders. **Key Points:** - USDS positioned as the world's largest yield-generating stablecoin - Growing institutional interest in stablecoin infrastructure - Shift toward yield-bearing digital assets in the market The conversation underscores an evolving landscape where stablecoin holders increasingly seek returns on their holdings, rather than accepting zero-yield positions.

Sky Protocol has established its **decentralized buyback mechanism** through the Sky Atlas, following approval by Sky Ecosystem Governance. The buyback parameters are now formally documented and accessible to the community. This governance-approved framework outlines how the protocol will execute buybacks in a decentralized manner. Full technical specifications and implementation details are available in the [Sky Atlas documentation](https://sky-atlas.io/#A.2.4.1.4.2.1). This marks a step in Sky Protocol's operational structure, providing transparency around its token economics and buyback procedures.

Sky Protocol purchased 130 million SKY tokens in January using 8.5 million USDS. The buyback program has now spent over 106 million USDS total since launching in February 2025. **Key figures:** - January buyback: 130M SKY tokens - Cost: 8.5M USDS - Total program spending: 106M+ USDS The protocol has been consistently buying back tokens, with previous weeks showing purchases of approximately 30M SKY tokens for around 1.9M USDS each week.

Morpho has launched two new products for Sky's USDS ecosystem: **USDS Vault** - Now live on Ethereum - Accessible at [app.morpho.org](https://app.morpho.org/ethereum/vault/0xf42bca228D9bd3e2F8EE65Fec3d21De1063882d4/skymoney-usds-risk-capital) **stUSDS/USDS Market** - Enables leveraged stUSDS positions - Users can supply stUSDS, borrow USDS, and loop back into stUSDS - Increases exposure to stUSDS yields - Available at [app.morpho.org](https://app.morpho.org/ethereum/market/0x77e624dd9dd980810c2b804249e88f3598d9c7ec91f16aa5fbf6e3fdf6087f82/stusds-usds?subTab=activity) **Launch Incentives** - 30,000 USDS allocated for USDS suppliers during launch week The integration allows stUSDS holders to amplify their positions through borrowing and re-staking strategies.

**Sky Protocol** significantly ramped up its token buyback program in November, purchasing **154 million SKY tokens** using 7.8 million USDS. This represents a major increase from the previous week's 40.5 million SKY buyback using 1.9 million USDS. **Key metrics:** - Total program buybacks now exceed **88 million USDS** - November's activity shows accelerated pace - All buybacks follow decentralized mechanism The buyback program operates through Sky Protocol's **Smart Burn Engine**, with parameters defined in the Sky Atlas and approved by Sky Ecosystem Governance. View real-time buyback activity at [Sky Protocol's dashboard](https://info.sky.money/buyback/activity/)

Sky Protocol has deployed a **new USDS/stUSDS pool** on Curve Finance with **500,000 USDS in incentives** distributed over three months to liquidity providers. **Key Changes:** - New pool functions as the **intended discount market** for stUSDS - Old sUSDS/stUSDS pool will now provide **boosted rewards** on top of stUSDS - Configuration fix addresses previous liquidity depth issues **Pool Details:** - New USDS/stUSDS pool: [Curve Link](https://www.curve.finance/dex/ethereum/pools/factory-stable-ng-628/deposit) - Address: 0x2C7C98A3b1582D83c43987202aEFf638312478aE - Old pool continues with enhanced rewards The deployment was **authorized by Sky Atlas** following governance voting. The Core Council may take additional actions to improve stUSDS liquidity conditions as needed. *All funds remain safe and users can withdraw anytime from existing pools.*

**Sky Protocol** executed another weekly buyback, spending **0.7 million USDS** to purchase **9.43 million SKY** tokens. This brings the protocol's **total buybacks to nearly 77 million USDS** since the program launched. Key details: - Buybacks operate through a **decentralized mechanism** - Parameters are governed by **Sky Ecosystem Governance** - Full specifications available in the [Sky Atlas](https://sky-atlas.powerhouse.io/A.3.6_Surplus_Buffer_and_Smart_Burn_Engine/c58d38dc-4b17-4c0a-a1df-546a06612c54|57ea) The systematic buyback program demonstrates Sky Protocol's commitment to **token value management** through governance-approved mechanisms. Track ongoing buyback activity at [info.sky.money](https://info.sky.money/buyback/activity/)