Sky Lending

Sky Lending is the lending arm of the Sky ecosystem, the rebranded continuation of what used to be MakerDAO and its Spark Protocol satellite. The flagship product is sUSDS - a yield-bearing version of USDS (the rebranded DAI) - which earns the Sky Savings Rate set by Sky governance. Depositors mint sUSDS by depositing USDS and earn yield that comes from three composable sources: tokenized U.S. Treasury bills held in collateral, stability fees on overcollateralized loans, and the spread on real-world-asset (RWA) facilities operated by partner trustees.

The lending side runs a money-market design comparable to Aave but with USDS-centric collateral assumptions: stablecoins are the dominant supply, and borrowable assets are weighted toward variants of USDS, ETH, and major LSTs. Interest rates are governance-set rather than fully utilization-driven, which produces more stable APYs than fully automated curves but introduces governance risk - bad governance decisions translate immediately into mispriced yield. The savings rate has historically been the single most important number in MakerDAO/Sky’s monetary policy and is voted on roughly monthly.

The MakerDAO/Sky codebase is among the most-audited in DeFi, with a continuous bug bounty (currently up to $10M for critical findings on the core Vat contract) and successful operation since 2017 across one of the worst stress events in crypto history (the March 2020 ETH crash that exposed flaws in liquidation auctions, since rewritten). The rebrand to USDS in 2024 included a hard-coded 1:1 swap with the legacy DAI; both tokens remain redeemable. Primary risk vectors today are RWA counterparty exposure, governance capture, and stablecoin depeg correlated with U.S. banking stress.