The DeFi savings protocol Sky recorded a loss of $5 million in the first quarter of 2025, a significant decline from a profit of $31 million in the previous quarter. The loss was primarily due to a 102% increase in interest expenses for its newly launched stablecoin USDS, aimed at attracting investors to shift from DAI to USDS. The USDS interest rate fell from 12.5% at the beginning of the year to 4.5% in February, but pressure from interest expenses remains. The total supply of USDS and DAI increased by 57% in the first quarter, with over $450 million in funds coming from the Ethena protocol, which uses the funds to stake USDS and distributes the earnings to its stablecoin USDe holders. (CoinDesk)