💥S&P Global assigns a 'B-' to Sky Protocol, signaling the entry of TradFi into the analysis of DeFi.
S&P Global Ratings has assigned a credit rating of 'B-' to Sky Protocol, the issuer of the stablecoin USDS. This unprecedented event, in which a TradFi agency evaluates a DeFi protocol, was reported by Danny Park in The Block, who had access to the official report. The rating implies a significant vulnerability of the protocol to adverse market conditions.
According to the report, S&P identified three main weaknesses:
* Centralized Governance: It is highlighted that the founder, Rune Christensen, maintains disproportionate power over the protocol.
* Liquidity Risk: A small group of large depositors creates a considerable risk of liquidity runs.
* External Vulnerability: The protocol is exposed to a lack of regulatory clarity and potential cyberattacks.
Although S&P acknowledges the protocol's track record, it considers that an upgrade in the rating is "highly unlikely" in the short term. This event marks a turning point, as the entry of traditional finance into the analysis of DeFi could redefine industry standards.
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Disclaimer ⚠️
This publication was created for informational and educational purposes. It is not an investment recommendation, nor legal, tax, or financial advice. 🚫
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