๐จโ๏ธThe DeFi protocol Sky reports a net loss of $5 million in the first quarter as USDS interest payments wiped out profits.
#nywlkalrhyb On May 14, according to CoinDesk, a report from Sky shareholders at Steakhouse Financial showed that the DeFi protocol Sky (formerly known as MakerDAO) suffered a net loss of $5 million in the first quarter, a sharp reversal from a profit of $31 million in the fourth quarter.
๐ค๐ฉธFrom last year. The main reason for the loss was a 102% year-over-year increase in interest paid to stablecoin holders, which is directly related to its strategy to promote the new stablecoin USDS to replace DAI. Roni Christensen, co-founder of Sky, confirmed that to attract capital flows, the savings rate on USDS was high at 12.5% (down to 4.5% in February), which
๐ถ๐น๐ถThis led to an increase in interest expenses. Currently, the interest rate on USDS is still higher than that of DAI, but Paper Imperium, the contact responsible for the governance of blockchain research company GFX Labs, indicated: "USDS has failed to create new demand, but has only made DAI holders who originally accepted zero interest switch to high-interest products."
๐ฆโกThe launch of USDS is a key initiative within Sky's "final plan," which aims to create a more compliant institutional stablecoin. While the total supply of USDS and DAI grew by 57% this quarter, much of this growth came from $450 million in collateral on the synthetic dollar protocol Ethena. Notably, Ethena recently transferred part of its USDS reserves to the BlackRock-backed USDtb, which may reduce the interest burden on Sky.
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