Sky (SKY)

"Sky has been engineered carefully to be able to handle whatever macro environment it finds itself in." As rates drop, credit spreads matter more. That means $SKY has to work harder to source yield - not just ride T-bills. But Rune's core point: DeFi giving you lower rates AND higher risk is annoying whether rates are at 5% or 2%. The opportunity is to fix the risk side, not just chase the yield. FT @andyyy @therollupco @RuneKek @SkyEcosystem

I’ve wanted to write about Sky for a while. MakerDAO was my first intro to DeFi and a big part of what pulled me into the space. The protocol has evolved meaningfully since then, but it remains one of the most important pillars of onchain credit. Despite its scale ($12B+ in stablecoin issuance, $160M in annualized NII) Sky remains undercovered relative to its role. This report is my attempt to help close that gap.

Security sounds boring, but Rune says it's actually Sky's growth strategy. In decentralized systems, security and risk management are what ENABLE scale - not what slow it down. "The key to growing $SKY huge and massive and making tons of profits - the key to that is through security and risk management." You can only onboard more collateral and more complexity if you can mathematically prove you understand every corner of your risk. That's the moat. FT @andyyy @therollupco @RuneKek @SkyEcosystem

Sky's decade of boring security obsession just paid off. During the worst DeFi contagion event in years, $SKY saw a "flight to quality." Users pulled out briefly - then came right back. "That really paid off in this crisis because you've got a sort of flight to quality." When the rest of DeFi was freezing up, Sky's track record meant users knew where to put their money. FT @andyyy @therollupco @RuneKek @SkyEcosystem

Security sounds boring, but Rune says it's actually Sky's growth strategy. In decentralized systems, security and risk management are what ENABLE scale - not what slow it down. "The key to growing $SKY huge and massive and making tons of profits - the key to that is through security and risk management." You can only onboard more collateral and more complexity if you can mathematically prove you understand every corner of your risk. That's the moat. FT @andyyy @therollupco @RuneKek @SkyEcosystem

Sky is more than 11 years old, with no security incidents for 6+ years, and no loss of funds in almost 9 years. Rune says what's happening in DeFi right now doesn't scare him - because it's all preventable. "None of what's being exploited is the kind of stuff that I'm scared of. It's all preventable." Restaking, exotic bridges, complex collateral - $SKY banned all of it long ago. The risk-adjusted return just isn't worth it. FT @andyyy @therollupco @RuneKek @SkyEcosystem

Sky's decade of boring security obsession just paid off. During the worst DeFi contagion event in years, $SKY saw a "flight to quality." Users pulled out briefly - then came right back. "That really paid off in this crisis because you've got a sort of flight to quality." When the rest of DeFi was freezing up, Sky's track record meant users knew where to put their money. FT @andyyy @therollupco @RuneKek @SkyEcosystem

Sky is more than 11 years old, with no security incidents for 6+ years, and no loss of funds in almost 9 years. Rune says what's happening in DeFi right now doesn't scare him - because it's all preventable. "None of what's being exploited is the kind of stuff that I'm scared of. It's all preventable." Restaking, exotic bridges, complex collateral - $SKY banned all of it long ago. The risk-adjusted return just isn't worth it. FT @andyyy @therollupco @RuneKek @SkyEcosystem

"Sky has been engineered carefully to be able to handle whatever macro environment it finds itself in." As rates drop, credit spreads matter more. That means $SKY has to work harder to source yield - not just ride T-bills. But Rune's core point: DeFi giving you lower rates AND higher risk is annoying whether rates are at 5% or 2%. The opportunity is to fix the risk side, not just chase the yield. FT @andyyy @therollupco @RuneKek @SkyEcosystem

"Sky has been engineered carefully to be able to handle whatever macro environment it finds itself in." As rates drop, credit spreads matter more. That means $SKY has to work harder to source yield - not just ride T-bills. But Rune's core point: DeFi giving you lower rates AND higher risk is annoying whether rates are at 5% or 2%. The opportunity is to fix the risk side, not just chase the yield. FT @andyyy @therollupco @RuneKek @SkyEcosystem