#DeFiGetsGraded Sky's B- marks the first instance where a leading credit rating agency has assessed a DeFi protocol.
Sky's USDS stablecoin has a market capitalization of $7.1 billion, ranking third after USDT and USDC.
This step is a continuation of S&P's increasing activity in the realm of tokenized funds and blockchain-based finance.
S&P Global Ratings has assigned a credit rating of B- with a stable outlook to the Sky Protocol issuer, a decentralized lending platform previously known as Maker Protocol, marking the first for the decentralized finance (DeFi) industry.
The Ethereum-based protocol issues the USDS stablecoin, created when borrowers provide approved collateral. With a market capitalization of $7.1 billion, USDS is only surpassed in size by USDT and USDC. Sky also offers yield-bearing vaults that allow holders to earn income through USDS savings (sUSDS).
Jonathan Manley, global head of market communications at S&P, called this rating a 'significant milestone' that will help provide greater transparency in the DeFi space.
This move comes amid S&P's expanding coverage in blockchain-based finance, recently evaluating tokenized treasury funds and blockchain mortgage securitizations. Sky itself is an investor in Janus Henderson's tokenized treasury products.
A separate assessment of the stablecoin's stability by S&P determines that USDS's ability to maintain its peg is rated 4 (limited) on a five-point scale.
The rating underscores the growing intersection of traditional credit analysis and the evolving DeFi market.
