Why did the price of SKY go up?
Sky (SKY) increased by 3.9% in the last 24 hours, slightly outperforming the overall crypto market’s 3.8% gain. The main reasons behind this growth are:
- Institutional Adoption – Mega Matrix added Sky’s USDS stablecoin to its $2 billion treasury, showing strong institutional trust.
- Solana Expansion – Sky’s Keel protocol launched a $2.5 billion plan to grow decentralized finance (DeFi) and real-world asset (RWA) projects on the Solana blockchain, increasing the ecosystem’s usefulness.
- Buyback Activity – Sky Protocol repurchased 17.32 million SKY tokens last week, reducing supply as demand rises.
Deep Dive
1. Institutional Treasury Integration (Positive Outlook)
Overview:
Mega Matrix, a company listed on the New York Stock Exchange (NYSE), expanded its $2 billion digital asset treasury to include Sky’s USDS stablecoin, alongside other major stablecoins like USDe and USDH (Yahoo Finance). This is one of the first multi-stablecoin setups approved by the U.S. Securities and Exchange Commission (SEC) for a public company.
What this means:
- Increases direct demand for USDS, which is tied to SKY through governance and staking.
- Confirms Sky’s compliance with regulations and its appeal to institutional investors, attracting more capital.
- USDS supply has grown 8.2% monthly, now totaling $7.5 billion, supporting ongoing revenue for SKY buybacks.
What to watch:
Look for Mega Matrix’s Q3 earnings report in November 2025 to see how their treasury allocations evolve.
2. Keel’s $2.5 Billion Solana Deployment (Positive Outlook)
Overview:
Sky’s Keel protocol launched as a Solana-focused project with a $2.5 billion roadmap to develop DeFi and RWA markets on Solana (CoinDesk). Early partnerships include Kamino and Jupiter.
What this means:
- Expands Sky’s presence beyond Ethereum, leveraging Solana’s fast and low-cost network.
- Boosts USDS’s use as a stablecoin across multiple blockchains, increasing fees earned by SKY stakers.
- Builds on the success of Spark, which has $10 billion in total value locked (TVL) on Ethereum, supporting Sky’s multi-chain growth strategy.
What to watch:
Monitor USDS liquidity on Solana and how quickly Keel rolls out its projects in Q4 2025.
3. Buybacks and Staking Incentives (Mixed Outlook)
Overview:
Sky Protocol repurchased 17.32 million SKY tokens (worth $1.22 million) last week, part of a larger 1.12 billion SKY buyback program. SKY holders who stake their tokens earn USDS rewards at 4.5% annual percentage yield (APY) and gain governance rights.
What this means:
- Buybacks reduce the number of SKY tokens available on the market (currently 23.4 billion), which can push prices up.
- However, technical indicators like RSI (Relative Strength Index) at 51.58 and MACD (Moving Average Convergence Divergence) histogram near zero suggest the price momentum is neutral, indicating possible price stability or consolidation.
What to watch:
Keep an eye on whether SKY’s price stays above the 7-day simple moving average (SMA) of $0.0671 for signs of a bullish trend.
Conclusion
Sky’s recent price increase is driven by growing institutional interest, expansion into the Solana blockchain, and token buyback programs that reduce supply. While short-term technical signals are neutral, the protocol’s strong revenue streams (around $230 million annualized) provide solid long-term support.
Key factors to watch: Adoption rates of USDS on Solana and the speed of SKY buybacks following Mega Matrix’s integration.
What could affect the price of SKY?
Sky (SKY) is at a critical point, with upcoming protocol updates and market changes influencing its future.
- Upgrade Penalty Deadline – Starting September 22, a 1% fee will apply to MKR→SKY conversions, which may speed up the reduction of SKY tokens in circulation.
- Buyback Activity – About $1.1 billion worth of SKY (around 3.28% of total supply) has been bought back, reducing available tokens.
- Ecosystem Growth – The launch of Keel, focused on Solana with $2.5 billion in funding, and a growing total value locked (TVL) of $15.4 billion, show increasing adoption.
Deep Dive
1. Tokenomics Changes (Mixed Effects)
What’s happening: Starting September 22, 2025, Sky Protocol will charge a 1% penalty on converting MKR tokens into SKY, increasing every quarter (SkyEcosystem). About 19% of MKR tokens (176,000 MKR, worth roughly $316 million) have yet to be converted, creating urgency for holders. At the same time, weekly buybacks have removed 1.12 billion SKY tokens (around $80 million) from circulation.
Why it matters: The penalty encourages MKR holders to convert their tokens sooner, which could reduce selling pressure on SKY. Buybacks make SKY tokens scarcer, potentially increasing their value. However, delaying conversions might split governance participation, affecting decision-making.
2. Growth in DeFi Ecosystem (Positive Outlook)
What’s happening: Sky’s “Stars” program, including projects like Spark, Grove, and Keel, is expanding across different blockchains. Keel’s $2.5 billion focus on Solana’s DeFi and real-world asset (RWA) markets (CoinDesk) and Grove’s $1 billion institutional investments in collateralized loan obligations (CLOs) could increase the use of USDS stablecoins, indirectly supporting SKY’s governance role.
Why it matters: More activity in the ecosystem means higher protocol revenue (estimated at $100 million per year), which funds buybacks and staking rewards. This creates a cycle of growing demand for SKY tokens as the network expands.
3. Regulatory and Market Risks (Caution Advised)
What’s happening: S&P gave Sky Protocol a B- rating, noting concerns about the stability of USDS’s peg to the dollar (Yahoo Finance). Meanwhile, Ethereum’s price dropped 19% from its recent high (as of September 25), putting pressure on DeFi tokens like SKY.
Why it matters: Increased regulatory scrutiny or issues with stablecoin stability could reduce investor confidence. SKY’s price tends to move closely with Ethereum (60-day correlation of 0.72), making it vulnerable to broader market downturns.
Conclusion
SKY’s future price depends on how smoothly MKR conversions happen, continued buybacks, and the success of Solana and RWA projects in offsetting market risks. Technical indicators like a neutral RSI (51.58) and resistance at $0.0768 suggest the price may consolidate before moving.
Key question: Will Keel’s Solana-focused launch attract enough value to counteract Ethereum’s bearish trend? Keep an eye on SKY’s 30-day token supply on exchanges and the stability of USDS for clues on what’s next.
What are people saying about SKY?
The Sky community is cautiously optimistic about upcoming protocol upgrades. Here’s what’s happening:
- Active buybacks are reducing the SKY coin supply by about 3.28% annually.
- Ecosystem growth is driven by the Stars program and $7.5 billion in USDS adoption.
- S&P Global’s B- rating raises concerns about centralization risks.
In-Depth Look
1. @SkyEcosystem: Buyback program approaching 1.1 billion SKY coins
“Spending 1.39 million USDS weekly to buy back SKY”
– @SkyEcosystem (213k followers · 12.4M impressions · August 4, 2025)
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What this means: This is positive for SKY holders. By buying back and removing about 3.28% of the circulating SKY supply each year, there could be upward pressure on the price. However, the success of this depends on the protocol generating enough revenue, currently around $230 million per year.
2. @SkyEcosystem: Stars program fuels $1.5 billion growth in total value locked (TVL)
“Spark Protocol brings in $226 million annually for Sky”
– @SkyEcosystem (213k followers · 9.8M impressions · July 21, 2025)
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What this means: This is a good sign. The adoption of tokenized collateralized loan obligations (CLOs) and over 20,000 wallets using the Sky Money App show that the ecosystem is expanding and gaining real-world use.
3. S&P Global: B- credit rating points out risks
“Governance is concentrated, with 9% of holders controlling decisions”
– S&P Global (August 8, 2025)
View original post
What this means: This is a warning sign. The rating highlights that the protocol relies heavily on its founder, Rune Christensen, and that liquidity risks exist. This could make more cautious investors hesitant.
Conclusion
The outlook for SKY is mixed. While buybacks and strong ecosystem growth (with TVL up 66% month-over-month) are encouraging, concerns about governance and a moderate fear/greed index score of 42/100 suggest investors should be careful. Keep an eye on the MKR-to-SKY upgrade completion rate, which was at 56% as of August 5. Starting September 18, penalties for those who don’t upgrade could speed up the reduction in supply.
What is the latest news about SKY?
Sky is balancing institutional adoption with expanding its ecosystem, even as penalties for delayed upgrades come into effect. Here’s the latest update:
- Treasury Expansion (October 1, 2025) – Mega Matrix integrates Sky’s USDS stablecoin into its $2 billion SEC-compliant digital asset treasury.
- Solana Integration (September 30, 2025) – Keel launches with $2.5 billion to support DeFi and real-world assets on the Solana blockchain.
- Governance Deadline (September 22, 2025) – A 1% penalty starts for MKR holders who haven’t converted their tokens to SKY.
Deep Dive
1. Treasury Expansion (October 1, 2025)
Overview:
Mega Matrix, a company listed on the New York Stock Exchange (NYSE), has expanded its $2 billion digital asset treasury to include Sky’s USDS stablecoin. This addition joins Ethena’s USDe and Hyperliquid’s USDH in their portfolio. The treasury uses a two-part strategy: allocating stablecoins to low-risk decentralized finance (DeFi) yield opportunities like Pendle staking, and holding governance tokens to influence protocol decisions.
What this means:
This move is positive for SKY because it shows that USDS is gaining trust among large institutions. It also suggests that Sky’s stablecoin ecosystem is becoming more attractive and that Mega Matrix is prepared to operate within regulatory guidelines. (Yahoo Finance)
2. Solana Integration (September 30, 2025)
Overview:
Keel, the third autonomous project within Sky’s network, launched with a $2.5 billion plan to deploy USDS on Solana’s blockchain. This includes supporting DeFi platforms like Kamino and Jupiter, as well as tokenized real-world assets. Keel joins Spark (with $10 billion in total value locked) and Grove (a $1 billion collateralized loan obligation strategy) as part of Sky’s broader effort to decentralize its ecosystem.
What this means:
This development is somewhat positive, as it broadens Sky’s ecosystem across blockchains. However, Solana’s network can be volatile, which might affect returns. Still, USDS is positioned as a key liquidity provider across multiple blockchains. Lily Liu, President of the Solana Foundation, called this integration “key” for growing institutional real-world asset investments. (CoinDesk)
3. Governance Deadline (September 22, 2025)
Overview:
A 1% quarterly penalty started for holders of MKR tokens who missed the September 18 deadline to convert their MKR to SKY tokens at a ratio of 1:24,000. As of September 19, over $316 million worth of MKR remains unconverted.
What this means:
This is a negative development for MKR holders who have not converted, but positive for SKY’s token economy. The penalty encourages token holders to convert, reducing the excess supply of MKR and strengthening governance control among committed SKY stakeholders. Sky’s dashboard reports that 81% of holders have completed the migration. (The Block)
Conclusion
Sky’s focus on regulated treasury management and expanding into Solana’s DeFi space shows a clear strategy to diversify its ecosystem. Meanwhile, enforcing penalties to encourage token migration helps consolidate governance. With USDS supply now exceeding $7 billion, the question remains: can Sky maintain competitive yields against major players like BlackRock’s BUIDL and Ethena’s USDe?
What is expected in the development of SKY?
Sky’s roadmap is focused on improving governance and growing its ecosystem:
- Delayed Upgrade Penalty (September 18, 2025) – A 1% penalty will be applied to MKR holders who haven’t converted to SKY by this date, increasing by 1% every three months after.
- Core Simplification Process (Q4 2025) – Simplifies governance by giving more decision-making power to a smaller “Core” group, allowing “Stars” (subDAOs like Spark and Grove) to focus on innovation.
- Atlas Rulebook Editor (Q4 2025) – A user-friendly tool to clearly define governance rules, making protocol operations easier to understand and follow.
Deep Dive
1. Delayed Upgrade Penalty (September 18, 2025)
Overview: MKR holders who haven’t upgraded to SKY by September 18, 2025, will face a 1% penalty on their holdings. This penalty increases by 1% every three months after that date (Sky Protocol Docs). As of October 2025, about 19% of MKR tokens remain unconverted.
What this means: This penalty encourages all holders to complete the upgrade, helping unify governance under SKY. However, it might discourage some holders who are hesitant to switch.
2. Sky Core Simplification Process (Q4 2025)
Overview: This community-led proposal aims to make governance simpler by concentrating decision-making in a smaller “Core” group. This allows “Stars,” which are smaller subDAOs like Spark and Grove, to focus on developing new ideas and projects (Sky Ecosystem tweet).
What this means: This change is positive for SKY because it can speed up growth and innovation. However, it also means more power is held by fewer people, which could be risky if decisions are unpopular.
3. Atlas Rulebook Editor (Q4 2025)
Overview: This is a no-code tool designed to clearly outline governance rules such as risk limits and revenue sharing. It’s currently about halfway finished (Sky Fusion Roadmap).
What this means: This tool could attract more institutional users by making governance more transparent and easier to follow. Its success depends on how widely it is adopted by governance delegates.
Conclusion
Sky’s roadmap aims to strengthen governance and expand its ecosystem by balancing penalties that encourage upgrades with tools that support decentralized growth. The evolving relationship between the “Core” group and “Stars” subDAOs will be key in shaping SKY’s future role in bringing decentralized finance (DeFi) to institutional users.
What updates are there in the SKY code base?
Sky’s software updates focus on improving governance, staking rewards, and overall protocol efficiency.
- Core Simplification Proposal (July 24, 2025) – Aims to streamline governance to help the ecosystem grow faster.
- Delayed Upgrade Penalty (May 22, 2025) – Introduces penalties for delayed MKR-to-SKY token conversions to phase out old tokens.
- SKY Staking Engine Launch (July 3, 2025) – Launches a new staking system that rewards users based on protocol performance.
Deep Dive
1. Core Simplification Proposal (July 24, 2025)
Overview: The Sky community is considering a proposal to simplify its core system. The goal is to reduce complexity and speed up the development of smaller projects within the ecosystem, called “Stars.” This would combine governance steps and resource management to make things more efficient.
The plan includes merging duplicate parts of the system and standardizing how new projects like Spark (SPK) and Grove connect to the network. If approved, this could lower transaction costs for governance by about 15% and make proposals execute faster.
What this means: This is positive for SKY because simpler governance can attract more developers and investment. However, if changes are rushed without enough testing, it could cause technical problems down the line. (Source)
2. Delayed Upgrade Penalty Mechanism (May 22, 2025)
Overview: Starting September 18, 2025, a penalty system reduces the conversion rate for MKR token holders who delay switching to SKY tokens. The penalty begins at 1% and increases every three months, encouraging holders to complete the upgrade.
Before penalties, 1 MKR converted to 24,000 SKY tokens. After the deadline, it drops dramatically to 0.78 SKY per MKR. Over 81% of MKR tokens have already been converted, but about $323 million worth remain unconverted.
What this means: This is neutral for SKY overall. It helps centralize governance around the new SKY token but may upset some legacy MKR holders. The protocol’s treasury benefits from penalties on unconverted tokens. (Source)
3. SKY Staking Engine Launch (July 3, 2025)
Overview: Sky introduced a new staking system where rewards are tied to the protocol’s revenue instead of fixed token emissions. Currently, over $77 million worth of SKY tokens are staked, earning rewards in USDS and SPK tokens at about 15% annual percentage yield (APY).
This upgrade replaces the old static reward model with dynamic payouts based on Sky’s annual revenue, which exceeds $100 million. Stakers keep their voting rights and can delegate governance power to others.
What this means: This is positive for SKY because it aligns the interests of long-term holders with the protocol’s success. However, rewards depend on continued revenue growth, which faces competition from newer stablecoins. (Source)
Conclusion
Sky’s software updates focus on making governance more efficient, phasing out old tokens, and aligning incentives through staking rewards. These changes strengthen SKY’s role as a decentralized finance (DeFi) governance token but rely on steady protocol revenue and user growth. The challenge will be balancing penalties for legacy holders with attracting new participants to shape Sky’s future decentralization.