Hristina Vasileva
The Sky Ecosystem, formerly Maker, is spreading its assets on Solana. The USDS stablecoin is now multi-chain, entering Solana-based DeFi.
Sky Ecosystem launched its USDS token on Solana, with the goal of spreading to its DeFi platforms. Solana goes beyond meme token trades and has the potential for lending, borrowing, and liquidity pairs. Sky is already adding even small Solana protocols, such as the recently active Loopscale. The DeFi app brings lending and borrowing with native and bridged Solana assets.
Welcome to Solana @SkyEcosystem!
Borrow fixed-rate USDS against staked assets, liquidity positions, and more on Loopscale. pic.twitter.com/JtddJcrEX3
— Loopscale (@LoopscaleLabs) November 19, 2024
Other protocols like Lulo are also preparing to add lending and borrowing markets in USDS. The stablecoin is also launched on Save, formerly Solend, one of the chief Solana lending protocols. Sky is using the Chronicle Protocol oracle to integrate its assets with Solana apps.
Sky Protocol announced its intentions to launch on Solana in September, taking about two months to supply the first USDS. For now, the liquidity and turnover will be in the hands of native Solana apps, and not a version of Sky Protocol itself.
To boost the adoption of USDS, Sky will offer up to 500K USDS in weekly rewards and incentives. The asset launches as a native token, formerly existing only in its Ethereum version. USDS can easily move to Ethereum’s L2, but an addition to Solana exposes Sky to a new source of liquidity and activity.
The tokens will reach Solana through Wormhole, which specializes in establishing native balances. The Wormhole bridge will be open for any holders of USDS to transfer to the new chain, with an additional 100K USDS in incentives.
The adoption of USDS on Solana is the first stage of deploying the entirety of Sky Protocol. This stage will build demand for USDS, but Sky will aim to connect the entire ecosystem, making it interchangeable with the liquidity on Ethereum. Users on all Solana platforms and apps will get the usual USDS savings rate of 8.3%.
Following the news of going live on Solana, the SKY native token expanded to $0.062, retaining that level since the November 7 rally. SOL rallied to $243.21 following another market expansion, further boosting its ability to support a DeFi sector.
USDS spreads to top Solana protocols
Sky will take care to spread its USDS to the top protocols on Solana. The DeFi sector on the Solana chain expanded rapidly with the growth of DEX protocols and SOL appreciation.
Solana carried more than $8.29B in value locked as of November 19, with the bulk of liquidity locked with Jito and Kamino.
The Sky ecosystem will move in with targeted incentives to boost USDS adoption on Kamino Finance and Drift Protocol.
On Kamino, Sky will offer 200K USDS for liquidity providers on the USDT/USDS pair. An additional 100K USDS will come to token suppliers. Drift Protocol will receive 100K USDS weekly, Save Finance will carry 400K in USDS incentives each month. Even Jito will receive 5K USDS weekly for a USDS/SOL liquidity pool.
The Sky Ecosystem also plans to integrate with other top Solana protocols. Those include the Jupiter DEX aggregator, Meteora, Phantom wallet, Orca, Pyth Network, and others. The end goal is to increase Solana’s available liquidity and DeFi pools. Over time, Sky will offer Solana-based versions of both USDS and sUSDS.
Sky Dollar (USDS) has a total supply of 5.27B, though still in the process of replacing DAI. Sky Protocol carries more than $13B in value locked. The protocol carries $5.35B in collateral assets, with a significant portion of RWA assets based on US T-bills. Sky Protocol also carries other crypto tokens as collateral. Sky decided to retain its WBTC vaults, as they make a small fraction of total collaterals.
The protocol itself has three main subDAOs, which produce yield and achieve the 8.3% annualized return on USDS. SkyFarm and the USDS Farm Vault are the main entities that provide passive income.
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