1 week ago
S&P Global Ratings has issued its archetypal recognition standing for a decentralized concern protocol, assigning Sky Protocol a B-minus with a unchangeable outlook.
The rating, published August 8, applies to the protocol’s stablecoin liabilities, including USDS and DAI, arsenic good arsenic their interest-bearing versions, but does not widen to governance tokens. The determination establishes a precedent for applying accepted recognition valuation frameworks to on-chain entities.
S&P cited respective constraints down the speculative-grade rating. Depositor concentration was a cardinal factor, with a tiny fig of participants controlling a ample stock of assets.
Governance centralization was besides flagged, with laminitis Rune Christensen holding astir 9% of governance tokens amid debased elector participation. The protocol’s risk-adjusted superior ratio of conscionable nether 0.5% was noted arsenic debased comparative to accepted recognition standards, alongside concerns implicit regulatory and cyber risks.
Per Ainvest, S&P equated Sky Protocol’s recognition illustration to that of the Republic of Congo’s sovereign debt, placing it firmly successful speculative territory. The agency’s unchangeable outlook reflects an anticipation that existent hazard factors volition persist implicit the adjacent 12 months, with upgrades contingent connected improvements successful governance decentralization, superior adequacy, and depositor diversity.
The appraisal besides recognized operational strengths. Sky has operated with minimal recognition losses since 2020, maintains diversified liquidity reserves that see fiat-backed stablecoins and tokenized funds, and has undergone outer astute declaration audits. These mitigants, portion supporting the rating, were outweighed by attraction and structural risks.
S&P’s introduction into protocol-level ratings follows its anterior evaluations of stablecoins, wherever it assigned “strong” to USDC and “constrained” to USDT successful earlier assessments.
The determination extends that model to the broader liabilities of a DeFi protocol, enabling definite organization counterparties specified arsenic premier brokers, insurers, and structured merchandise arrangers to notation a standardized measurement of recognition risk.
Such ratings could present power however DeFi yields are priced. A defined recognition hazard illustration enables the repricing of lending and liquidity provisions successful enactment with accepted recognition markets, alternatively than solely connected supply-demand dynamics wrong protocols.
The instauration of recognized recognition benchmarks besides creates a pathway for DeFi vulnerability to conscionable mandates from regulated entities that necessitate minimum standing thresholds.
Sky Protocol’s standing is improbable to alteration successful the adjacent term, according to S&P’s published methodology, though aboriginal governance and superior reforms could change that trajectory.
The agency’s investigation adds a formalized hazard lens to DeFi operations, providing a communal notation constituent for some on-chain participants and accepted fiscal institutions seeking to prosecute with the sector.
The station What S&P’s archetypal DeFi protocol standing unlocks for on-chain recognition successful 2026 appeared archetypal connected CryptoSlate.
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