S&P Global Assigns First-Ever B- Credit Rating to DeFi Platform Sky Protocol

Key Points

1. S&P Global gave Sky Protocol a B- credit rating, marking the first such rating for a DeFi platform, focusing on its USDS and DAI stablecoins and sUSDS and sDAI savings tokens.

2. USDS received a 'constrained' score of 4 on S&P's stability scale for maintaining its dollar peg, with Sky Protocol being a decentralized lending platform supporting crypto-backed loans.

3. USDS is the fourth-largest stablecoin by market cap, with $5.36 billion in circulation, and S&P defines a default as a 'haircut imposed on token holders' due to liquidity or credit losses.

4. S&P ranked Circle’s USDC as 'strong' (2), while Tether’s USDT and Sky’s USDS were rated 'constrained' (4), citing Tether’s transparency issues and USDS's complex asset base and weaker governance.

5. S&P launched its stablecoin stability framework in December 2023 and has since rated blockchain-based mortgage securitizations, reflecting growing global regulatory focus on stablecoins.