Sky Ecosystem: April Financial & Operational Update

Welcome to the second Sky Ecosystem Financial & Operational Update, published by the Sky Frontier Foundation (SFF).

Executive Summary

In April, SFF released the Q1 2026 Quarterly Report, marking the strongest quarter in Sky Protocol history across Gross Protocol Revenue, Net Protocol Revenue, and Net Protocol Surplus. USDS supply reached an all-time high near $12B and major centralized exchanges completed the upgrade from DAI to USDS, consolidating liquidity around Sky Protocol's upgraded stablecoin.

Sky Governance has reinforced its strategic shift from capital distribution to capital retention, rerouting Net Protocol Surplus from programmatic buybacks and staking rewards toward building a $150M Sky Reserves target. The capital framework prioritizes protecting USDS holders and reinforcing protocol resilience over near-term token holder distributions.

Key Highlights:

• Q1 2026 Report Published: SFF published the Q1 2026 Quarterly Report on April 29. Sky Protocol delivered Gross Protocol Revenue of $123.79M, the highest quarterly revenue in protocol history, and Net Protocol Surplus of $46.04M.
• Live Sky Protocol Financial Dashboard Launched: Sky Frontier Foundation launched the Sky Protocol Financial Dashboard, providing real-time public visibility into Protocol Collateral, Protocol Obligations, P&L, Sky Agent allocations, the Sky Reserves Target and more.
• USDS Reaches All-Time High: USDS supply reached an all-time high of $11.82B on April 5, reflecting continued acceleration in institutional and retail adoption.
• Capital Allocation Adjustments Executed: Sky Governance executed the planned reductions to the SKY staking rewards and Sky Savings Rate, accelerating Sky Reserves accumulation toward the $150M solvency target.
• John Conneely Appointed Global Head of Business Development: Sky Frontier Foundation appointed John Conneely as its first dedicated commercial executive, effective April 1. Conneely reports to the Foundation's Board and brings senior leadership experience from FalconX, Genesis, and Bakkt to lead institutional USDS adoption across prime brokers, fintechs, neo-banks, exchanges, corporate treasuries, and traditional finance.
• Major Exchange Upgrade to USDS Completed: Binance, Bitget, Gate, HTX, KuCoin, and MEXC completed their upgrades from DAI to USDS in early April with automatic 1:1 conversion of user balances, consolidating centralized exchange liquidity around Sky Protocol's upgraded stablecoin.
• Laniakea Framework Introduced: Sky Protocol publicly introduced Laniakea, an innovative framework currently being worked on to standardize governance structures and collateral exposure across smart contracts, risk management, data infrastructure, and legal recourse.
• Quarterly Insights Call: SFF will host its first Quarterly Insights Call on May 13 to walk ecosystem participants through Q1 2026 results. Participants can submit their questions through this form.

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Sky Protocol Financials & Onchain Metrics

Net Protocol Revenue more than tripled year-over-year, driven by both top-line growth and margin expansion as the protocol scaled into Q1's record performance. The driver was a combination of stablecoin supply growth (USDS up 49% YoY) and operating leverage as expense growth lagged revenue growth.

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Sky Ecosystem Q1 2026 Quarterly Report

SFF published the Q1 2026 Quarterly Report on April 29. Sky Protocol delivered Gross Protocol Revenue of $123.79M (the highest quarterly revenue in protocol history), Net Protocol Revenue of $60.73M (margin expansion to 49.06% from 30.24% in Q4 2025), and Net Protocol Surplus of $46.04M, a single-quarter result that nearly matched full-year 2025.

The report introduces balance sheet reporting for the first time, providing institutional visibility into Protocol Collateral ($13.03B, +49.1% YoY), Protocol Obligations ($12.96B), and Protocol Surplus ($63.47M). Q1 results outperformed SFF's published 2026 forecast across every key metric.

The full report, including monthly and quarterly P&L tables and the complete balance sheet, is available here. 

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Live Financial Dashboard Launched

Sky Frontier Foundation launched the Sky Protocol Financial Dashboard, making the protocol's full financial state continuously visible and accessible to anyone in real time. The dashboard surfaces balance sheet, P&L, capital allocations, and Sky Agent allocations directly from onchain data.

Traditional financial reporting operates on quarterly cycles, and by the time a report is published the underlying data is already months old. This dashboard replaces periodic disclosure with continuous visibility, advancing institutional-grade transparency and supporting the protocol's positioning as infrastructure that institutional capital allocators can underwrite.

Capital Markets Activity

Fixed-Rate USDS Tokens Strategic Direction: The Sky Core Council outlined a strategic direction to explore fixed-term, fixed-rate USDS-denominated tokens as a mechanism to strengthen USDS demand and expand utility. Per Sky Atlas, $5M from initial allocations has been distributed to the USDS Demand Subsidies Multisig to support early adoption. Specific parameters and timelines will follow in subsequent governance proposals.

USDS Native Deployment on Avalanche: The deployment broadens multichain availability for USDS and sUSDS and extends Sky Protocol's distribution footprint into one of the largest non-EVM ecosystems.

SKY Listed on Revolut: SKY became available to Revolut users across the European Economic Area, expanding distribution into mainstream fintech infrastructure beyond crypto-native exchange venues.

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Governance & Risk Management

Sky Reserves Update: Sky Reserves stand at $60.73M against the $150M solvency target at the time of this writing. SFF estimates reserves could approach approximately $75M by the end of Q2 2026 based on recent accumulation rates. The April adjustment to the Sky Savings Rate directly supports this trajectory. 

Sky Savings Rate Reduced to 3.65%: The Sky Savings Rate was reduced from 3.75% to 3.65% during April to accelerate Sky Reserves build-out. The reduction directs more Net Protocol Surplus into reserves, supporting the protocol's transition toward a reserve-funded capital model.

Laniakea Framework Introduced: Sky Protocol introduced Laniakea, a framework standardizing governance structures and collateral exposure across four dimensions: smart contracts, risk management, data infrastructure, and legal recourse. Laniakea provides a unified approach to security and capital allocation that supports the protocol's institutional positioning.

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Operational Updates & Integrations

Grove Genesis Capital Deployed: Grove received its $25M genesis capital allocation during April. The deployment completes the next major expansion of the Sky Agent Network and concludes the protocol's bootstrap funding phase.

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Leadership & Organization

John Conneely Appointed Global Head of Business Development: Sky Frontier Foundation appointed John Conneely as Global Head of Business Development, effective April 1, 2026. Conneely is SFF's first dedicated commercial executive across Sky Ecosystem, reports directly to the Foundation's Board of Directors, and holds a direct mandate to drive USDS adoption with prime brokers, fintechs, neo-banks, exchanges, corporate treasuries, and traditional finance firms.

Conneely previously led commercial execution and global partnerships at FalconX's custody and staking business, scaled Genesis's global custody team from two to over 40 professionals while facilitating $1.25B in single-quarter deposits, and launched Bakkt's custody platform alongside the first CFTC-regulated Bitcoin futures product. SFF noted the appointment marks the first phase of a broader commercial expansion. (press release)

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Looking Ahead

Quarterly Insights Call: SFF will host its first Quarterly Insights Call, released May 13 to walk ecosystem participants through Q1 2026 financial and operational results. The call runs in pre-submitted Q&A format with Rune Christensen answering questions. Participants can submit questions in advance via the form here. Submissions close May 10.

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Contact

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Have a question, seeking specific data requests or further clarification on Sky Ecosystem metrics? Contact us at insights@skyeco.com

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