S&P rates a DeFi protocol for the first time — Sky receives a B- 😿
🤔 Why does this matter?
S&P Global awarded a B- (speculative grade) to Sky Protocol — formerly known as Maker — evaluating its stablecoins USDS and DAI, in a groundbreaking event for DeFi.
⚠️ Risks highlighted by S&P:
- Concentration of depositors and centralized governance. The co-founder controls 9% of the governance tokens and there is low overall participation.
- Fragile liquidity: deficits in reserves and risk-adjusted capital (only 0.4%).
- Regulatory threats and insecurity regarding potential vulnerabilities in smart contracts.
✅ The positives:
- S&P recognized the operational resilience of Sky since 2020, with few credit losses, good settlement systems, and audits in its architecture.