Why did the price of SKY fall?
Sky (SKY) dropped 1.43% over the last 24 hours to $0.0547, underperforming the overall crypto market, which fell 1.06%. The main reasons behind this decline are uncertainty around governance decisions, technical resistance levels, and outflows from the decentralized finance (DeFi) sector.
- Governance Proposal Triggers Selling Pressure
- Technical Signals Point to Weakness
- DeFi Sector Instability Affects SKY
Deep Dive
1. Governance Changes (Negative Impact)
Overview: On October 31, Sky’s Executive Vote proposed several changes: replacing USDS staking rewards with SKY rewards, increasing daily buybacks to 300,000 USDS (about $16,400), and moving 500 million SKY tokens (worth around $27.35 million) to the treasury.
What this means: Although buybacks usually reduce the number of tokens in circulation, switching rewards from a stablecoin (USDS) to a more volatile token (SKY) introduces uncertainty. Investors might worry about liquidity risks for USDS holders or dilution risks for SKY stakers.
What to watch: The final vote results expected by November 11 and whether the increased buybacks will balance out any selling caused by the new reward system.
2. Technical Resistance Holds (Neutral to Bearish)
Overview: SKY is facing resistance near its 30-day simple moving average (SMA) at $0.0575 and the 50% Fibonacci retracement level at $0.057558. The Relative Strength Index (RSI) over 14 days is at 50.13, indicating neutral momentum. The MACD line remains below its signal line, although the histogram shows some positive signs.
What this means: Traders view the $0.0575 level as a key point to confirm upward momentum. Until SKY breaks above this, the 7-day exponential moving average (EMA) at $0.0533 and support at $0.0545 are important. Falling below these could lead to faster losses.
3. DeFi Sector Concerns (Mixed Effects)
Overview: A $42 billion outflow from DeFi, triggered by the depegging of xUSD on November 4, has put pressure on DeFi tokens. Sky’s USDS stablecoin has actually grown by 8% to $5.7 billion, bucking the trend. However, SKY’s price still closely follows overall DeFi market sentiment.
What this means: Despite strong fundamentals like USDS growth and over $1.1 billion in buybacks, traders are generally pulling out of DeFi assets. The Fear & Greed Index at 31 (Extreme Fear) highlights the cautious mood in the market.
Conclusion
SKY’s recent price drop reflects uncertainty around governance, technical hurdles, and shaky sentiment in DeFi. However, the stability of USDS and aggressive buybacks offer some protection against further declines. Key points to watch: Can SKY maintain support at $0.0545? Will the new rewards system attract new investors after the vote? Also, keep an eye on Bitcoin dominance (currently 59.27%) as it influences liquidity for alternative coins.
What could affect the price of SKY?
Sky’s price is caught between positive protocol upgrades and challenges in the decentralized finance (DeFi) market.
- Buybacks & Staking Rewards – The project is actively reducing token supply to support price.
- SparkLend Migration – Moving users to new systems brings short-term risks but aims for long-term benefits.
- Stablecoin Market Stress – Sky’s stablecoin, USDS, is holding up but faces pressure from broader market fears.
Deep Dive
1. Tokenomics Overhaul (Positive Outlook)
Overview: Sky’s leadership recently increased daily buybacks to 300,000 USDS—about a 50% rise—and set aside 500 million SKY tokens (worth roughly $28 million) for staking rewards. Since July 2025, over 1.12 billion SKY tokens (5% of total supply) have been bought back, which helps reduce selling pressure.
What this means: Regular buybacks can balance out the increase in tokens released from staking rewards. The current staking reward rate of 5.71% APY for USDS holders is attractive for investors looking for steady returns. However, the program’s success depends heavily on the protocol generating enough revenue (around $100 million per year), which is linked to how widely USDS is used.
2. SparkLend Collateral Shift (Mixed Effects)
Overview: In October 2025, SparkLend stopped supporting older collateral types (sUSDS and sDAI), requiring users to move their assets to new vaults. This change is part of Sky’s strategy to focus on “Stars” — smaller, specialized groups within the network like Spark — that manage specific yield strategies.
What this means: There was a short-term loss of about $126 million in total value locked (TVL) due to liquidations, which could put downward pressure on SKY’s price. However, this shift allows for better risk management and the planned integration of PYUSD stablecoin could increase the utility and stability of the ecosystem over time.
3. DeFi Stablecoin Crisis (Potential Downside)
Overview: In November, the DeFi sector saw a massive $42 billion outflow after the stablecoin xUSD lost its peg, impacting many yield-focused stablecoins. Despite this, Sky’s USDS stablecoin grew by 8% to $5.7 billion during the turmoil. Still, the overall market sentiment remains cautious, with the Fear & Greed Index at 31/100, indicating extreme fear.
What this means: USDS is viewed as a safer, improved version of the well-known stablecoin DAI, which could help SKY weather ongoing market uncertainty. However, if distrust in DeFi continues, it may slow down investment into governance tokens like SKY.
Conclusion
Sky’s future depends on successfully managing buybacks while overcoming the current DeFi market challenges. The SparkLend migration and growing USDS adoption on Layer 2 networks through SkyLink are key to increasing revenue. Keep an eye on the USDS/TVL ratio — if it falls below $2 billion (currently $2.4 billion), it could signal weakening demand for staking. The big question is whether Sky’s “Stars” can shine bright enough to restore confidence in a shaky market.
What are people saying about SKY?
The Sky (SKY) community is buzzing about recent developments, including buybacks and staking rewards, especially after SKY was listed on Coinbase. Here’s a quick summary of what’s happening:
- Buybacks have removed 1 billion SKY tokens – a positive sign
- Over $10 million in USDS rewards paid out in 45 days – encouraging for investors
- Coinbase listing caused price swings – mixed effects
Deep Dive
1. Buybacks Reduce Supply by 3.28%
Sky’s official account (@SkyEcosystem) announced that since the buyback program started, they have repurchased 1.11 billion SKY tokens, which is about 3.28% of the total supply.
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Why it matters: Buying back tokens takes them out of circulation, which can help support the price by reducing the number of tokens available to sell. On average, the program burns over $1 million worth of USDS each week, showing strong commitment to this strategy.
2. Staking Rewards Reach Over $21 Million USDS
Sky also shared that more than $21 million in USDS rewards have been distributed to people who stake their SKY tokens. Currently, about 947 million SKY tokens (valued at $77 million) are staked, earning an annual percentage yield (APY) of 12.75%.
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Why it matters: High staking rewards encourage more people to lock up their tokens, which reduces supply and shows strong user engagement. These rewards come from the protocol’s revenue, which is projected to be $230 million annually, indicating a healthy ecosystem.
3. Coinbase Listing Sparks Volatility
Coinbase announced that SKY and USDS are now available for trading on their platform. After the listing in July 2025, SKY’s price jumped nearly 8% initially but has since experienced ups and downs.
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Why it matters: Being listed on a major exchange like Coinbase increases visibility and access for investors, but the long-term price impact depends on how much trading activity (liquidity) SKY maintains. Currently, the turnover ratio is low at 1.28%, suggesting limited trading volume relative to supply.
Conclusion
Overall, the outlook for Sky (SKY) is positive. The buyback program and attractive staking rewards create scarcity and incentives for holding, which can support the token’s value. However, liquidity challenges following the Coinbase listing mean investors should watch the staking ratio closely—it’s currently about 41% of circulating SKY. If staking continues to grow, it could help stabilize SKY against wider market fluctuations.
What is the latest news about SKY?
Sky is navigating challenges in decentralized finance (DeFi) with smart upgrades and increased token buybacks. Here’s the latest update:
- DeFi Outflows Boost USDS Growth (November 9, 2025) – Despite $42 billion leaving the DeFi space, Sky’s stablecoin USDS is gaining market share.
- SparkLend Phases Out Old Collateral (November 7, 2025) – Sky’s lending platform is moving away from older tokens like sUSDS and sDAI to improve liquidity management.
- Buybacks Double to Support SKY Token (November 3, 2025) – Daily repurchases of SKY tokens have doubled to 300,000 USDS to help increase demand.
In-Depth Look
1. DeFi Outflows Boost USDS Growth (November 9, 2025)
What happened: The DeFi sector saw $42 billion in withdrawals after some yield-focused stablecoins lost their value peg. During this shakeup, Sky’s stablecoin USDS stood out by growing its supply by 8%, reaching $5.7 billion. Unlike some competitors, USDS doesn’t offer high yields, which made it more attractive to cautious investors.
Why it matters: USDS’s stability during a market crisis shows it can be a safe option for investors avoiding risk. However, if overall trust in DeFi continues to decline, it could slow down growth in the Sky ecosystem. (AMBCrypto)
2. SparkLend Phases Out Old Collateral (November 7, 2025)
What happened: SparkLend, a lending platform within the Sky ecosystem, is retiring older collateral types like sUSDS and sDAI. Users are encouraged to move their assets to new vaults managed by the Spark Liquidity Layer, which aims to improve yield and risk management.
Why it matters: This change helps reduce complexity and fragmentation in Sky’s liquidity pools, making the system easier to govern and more efficient. While some users might face short-term inconvenience, the update should strengthen USDS’s overall usefulness. (CoinMarketCap)
3. Buybacks Double to Support SKY Token (November 3, 2025)
What happened: Sky’s governance approved doubling daily buybacks of SKY tokens from 150,000 to 300,000 USDS. Additionally, 500 million SKY tokens will be allocated to staking rewards. This comes after the token’s price dropped 7.8% in one week, falling to $0.0558.
Why it matters: Increasing buybacks shows confidence in the SKY token’s value and aims to boost demand. However, this strategy depends on Sky’s treasury, which currently holds about $1.2 billion. If market conditions worsen, sustaining these buybacks could become challenging. (Yahoo Finance)
Conclusion
Sky is strengthening its ecosystem during a tough period for DeFi by relying on the stability of USDS and proactive token management. These efforts could help Sky become a trusted “safe harbor” stablecoin provider. However, ongoing skepticism in the DeFi sector may limit growth. Keep an eye on USDS adoption and SKY staking activity to see how these changes play out.
What is expected in the development of SKY?
Sky is making steady progress with these key goals:
- Decentralized Operations Platform – Launching in Q4 2024 – Completing the setup of main tools like Fusion and Switchboard.
- Atlas Rulebook Editor Integration (Q4 2024) – Connecting governance documents with Powerhouse tools for smoother updates.
- Powerhouse Spin-off Acceleration (Q4 2024) – Setting up legal and financial structures to make Powerhouse an independent part of the ecosystem.
In-Depth Look
1. Decentralized Operations Platform – Launching in Q4 2024
What’s happening:
Sky is rolling out a full version of its operational system, which includes Fusion (a transparency dashboard), Switchboard (data APIs), and Renown (an identity system). They’re about 92% done, and the updated tools are already available on Sky.money subdomains.
Why it matters:
This is good news for SKY because a smoother, more reliable infrastructure can attract more developers and institutions. The main challenge is making sure these new tools work well with older systems, which could cause delays.
2. Atlas Rulebook Editor Integration (Q4 2024)
What’s happening:
Sky plans to link its governance rulebook, called Atlas, directly into the Powerhouse platform. This will allow real-time updates and voting to stay in sync. The document setup is mostly done (85%), but long-term planning is still in early stages (10%).
Why it matters:
This update won’t directly affect SKY’s price but will make governance smoother and clearer. Better governance can help avoid conflicts and support the project’s stability over time.
3. Powerhouse Spin-off Acceleration (Q4 2024)
What’s happening:
Sky is working to make Powerhouse a separate, independent part of its ecosystem. They’re 39% done with legal setup, token design, and growing the community. Important next steps include bringing in outside clients and finalizing a DAO token model.
Why it matters:
If done right, this could be very positive for SKY by reducing dependence on USDS revenue. However, there are still uncertainties around token economics (only 15% complete) and potential regulatory challenges.
Summary
Sky’s roadmap focuses on strengthening its infrastructure and making the ecosystem more decentralized. The immediate priorities are finishing Powerhouse tools and integrating governance. While progress is strong, success depends on navigating tokenomics and gaining wider adoption. A key question remains: how will the 2025 Atlas-Powerhouse plan handle growth as USDS adoption slows?
What updates are there in the SKY code base?
Sky’s recent code updates focus on improving governance security, simplifying token use, and making staking more efficient.
- Flash Loan Protection (May 2025) – New safeguards prevent quick, manipulative voting attacks.
- IOU Token Removal (May 2025) – Easier governance participation by removing extra token steps.
- Lockstake Engine V2 (May 2025) – Improved collateral handling and smoother migration for stakers.
Deep Dive
1. Flash Loan Protection (May 2025)
What’s happening? Sky upgraded its system to stop flash-loan attacks, where someone borrows tokens briefly to influence votes unfairly. Now, users can’t perform certain voting actions ("lift" and "free") in the same block of transactions.
The update adds a waiting period after a "lift" action (which grants voting power) and changes how timestamps are recorded to better reflect long-term token holding.
Why it matters: This makes governance safer and more trustworthy, which is good news for SKY holders. It helps ensure decisions are made by committed participants, not short-term manipulators. (Source)
2. IOU Token Removal (May 2025)
What’s happening? Sky removed IOU tokens from its governance process. Before, when users locked SKY tokens, they received IOUs that had to be managed separately. Now, users lock and unlock SKY directly, cutting out extra steps.
Why it matters: This change simplifies the user experience. While current IOU holders will need to adjust, overall it makes governance participation more straightforward and efficient. (Source)
3. Lockstake Engine V2 (May 2025)
What’s happening? The staking engine now uses SKY tokens directly instead of relying on MKR tokens. It also includes a new migration tool to help users move their existing positions from the old system (V1) to the new one.
Key improvements include removing complex token conversions, setting exit fees to zero, and simplifying how collateral is tracked. The migration tool even supports flash loans to ease the transition.
Why it matters: This reduces reliance on outside data sources, lowers costs, and encourages users to upgrade to the improved system—all positive for SKY’s growth and stability. (Source)
Conclusion
Sky’s updates prioritize security, ease of use, and scalability as it moves away from MakerDAO’s legacy system. With penalties now in place for delayed MKR-to-SKY upgrades, these technical improvements aim to boost long-term participation and strengthen the protocol’s resilience.