SKY

Key facts

Assessment

Sky has the clearest revenue engine among the stablecoin governance tokens: about $160M a year of net revenue on ~$11.4B of USDS and DAI, and a working mechanism that converts a governance-set share of it, ~44% at the current rate, into USDS and SKY paid to the ~74% of supply that is staked. The weak points are that every part of it is policy: the March 2026 cut showed governance will divert the flow to reserves (still $82.4M against a $150M target at Jun 30, 2026), bought SKY is held and re-vested rather than burned, and buybacks run on new system debt while the vow's surplus is negative. Supply is disciplined in practice (no mint since Jun 2025, supply back at the MKR equivalent after a Jun 2025 treasury burn), but SKY holders can mint, upgrade the stablecoin and redirect revenue after a 48-hour delay, and two delegates hold 64.4% of delegated voting power. Genesis was a founder and foundation distribution with VC sales and no public sale, so distribution stays at the floor despite ten years of trading. Net revenue after savings costs fell ~48% between Q3 2025 and Q3 2026 as the savings rate and spread were cut, so the engine is real but not growing.

How value reaches holders

Paid to stakers by governance policy, not burned. Since the Aug 13, 2026 executive, the Smart Burn Engine splitter takes a 6,000 USDS kick every 2,693 seconds (~192.5K USDS/day, ~$70M/yr after the Oct 8 spell): 45% is streamed as USDS to SKY stakers who choose the USDS farm, and 55% buys SKY on Uniswap into the Pause Proxy (the governance treasury, not a burn address). The treasury pays SKY back to stakers who choose the SKY farm through 90-day vests (99.5M SKY from Oct 12, 2026 to Jan 10, 2027, ~1.1M SKY/day) and burns part of the remainder at each monthly settlement (2.86M SKY on Sep 13 and 7.37M on Oct 12, 2026). Over the trailing year the engine bought 795M SKY while the treasury vested ~1.33B SKY to stakers, drawing down earlier buybacks; DefiLlama counts ~$57M of holder revenue, ~29% of $196M revenue after savings costs. Governance cut the flow 87.5% on Mar 12, 2026 (~300K to ~37.6K USDS/day, all to buybacks) to rebuild reserves, restored it to ~138K/day in August and raised it in September and October. A 4-of-6 operator Safe (SBE BEAM) can retune it within bounds (kbump up to 12,000 USDS, hop at least 550 seconds, at most 350M USDS/yr). Each kick is new system debt (vat.suck) and is allowed while the vow's surplus stays above -200M USDS; it read about -47.8M on Oct 23, 2026. MKR upgrades at 24,000 SKY per MKR minus a Delayed Upgrade Penalty of 5% (1% from Sep 2025, plus 1 point per quarter)

Score anatomy

What would move it up

To reach T2 Strong, one gate is still open:

• ○Distribution 0needs 1(open)
• ✓Score 60gate 55(met)
• ✓Value engine 3gate 3(met)
• ✓Adoption 4gate 3(met)
• ✓Supply 4gate 2(met)
• ✓Security 2gate 2(met)
• ✓Float and unlocks 5gate 1(met)
• ✓Scale 3gate 3(met)

Tier outlook · next trigger Jan 10, 2027

Two-waymedium likelihood

• Splitter rate changes by executive or by the 4-of-6 SBE BEAM operator Safe (kbump, hop) and any cut toward the March 2026 level
• Reserve fill vs the $150M target ($82.4M at Jun 30, 2026) and the vow's surplus vs the Kicker's -200M USDS floor (about -47.8M on Oct 23, 2026)
• Share of bought SKY burned rather than re-vested to stakers at each monthly settlement; the current SKY-farm vest ends Jan 10, 2027
• Any SKY mint by executive vote or a new mintable reward vest; delegate concentration (two delegates at 64.4%)
• Net revenue after savings costs vs ~$160M/yr (down ~48% from Q3 2025 to Q3 2026) and USDS plus DAI supply (~$11.4B on Oct 23, 2026)

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