Sky Ecosystem: March Financial & Operational Update

Welcome to the inaugural Monthly Financial & Operational Update, published by the Sky Frontier Foundation.

Each month, this briefing covers the protocol data, capital markets activity, and governance developments that matter to ecosystem participants.

Executive Summary

March marked a monumental inflection point for Sky Ecosystem, characterized by unprecedented stablecoin growth, public market adoption of SKY, significant real-world asset deployments, and a proactive shift from Sky Governance in capital strategy designed to cement Sky Protocol as the industry standard for stablecoin resilience and robust capital management.

Key Highlights:

• USDS Reaches All-Time Highs: USDS supply surged from $9.8 billion to $11.7 billion and is currently one of the fastest-growing stablecoins in the world according to DefiLlama.
  
  
• Public Market Adoption: NovaBay Pharmaceuticals (NASDAQ: NOVB) officially rebranded to Stablecoin Development Corporation (SDEV), pivoting to an onchain holding company and accumulating approximately 8.78% of the circulating SKY supply.
  
  
• $1B RWA Deployment Initiated: The Obex incubator launched Cohort 1, activating an initial $1 billion deployment across eight new Sky Agents, featuring financial industry leaders such as public mortgage lender Better, Maple, and Securitize. This cohort bridges traditional, high-quality yield sources directly onchain into Sky Protocol.
  
  
• Strategic Capital Restructuring: Sky Governance enacted reductions to the SKY buyback rate and staking rewards to accelerate the build-out of protocol capital reserves. Governance has signalled a commitment to long-term stablecoin resilience over short-term yield optimization.

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Sky Protocol Financials & Onchain Metrics

Capital Markets Activity

SDEV: Public Company Acquires SKY Tokens: NovaBay Pharmaceuticals (NASDAQ: NOVB) rebranded to Stablecoin Development Corporation (SDEV) on March 23, pivoting from healthcare to an onchain holding company built for the Stablecoin Economy. SDEV secured $134M in private funding, with involvement from Tether and Framework Ventures, and invested approximately $147M in SKY tokens, accumulating roughly 8.78% of circulating supply. SDEV is now staking a portion of its 2.06 Billion SKY tokens.

Obex Incubator Activates $1B RWA Deployment: The Framework Ventures-backed Obex incubator officially launched Cohort 1 of its Sky Agents, activating an initial $1 billion deployment. This cohort focuses on moving beyond circular crypto economics by bridging traditional, high-quality yield sources directly with onchain finance to boost USDS utility. The deployment spans eight major TradFi and DeFi partners: public mortgage lender Better, Maple, Securitize, Centrifuge, USD.ai, Daylight, River, and TVL Capital.

Industry-Wide Exchange Upgrade to USDS: Major crypto exchanges are actively executing upgrades from DAI to USDS. Binance, the world's largest exchange by volume, announced the transition to USDS coming in early April, with Bitget, Gate, HTX, Kucoin, MEXC and other leading venues following suit. This coordinated, industry-wide upgrade consolidates primary trading liquidity around the USDS stablecoin, improving capital efficiency and deepening market depth for institutional participants.

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Governance & Risk Management

Strategic Capital Restructuring: Participants within Sky Ecosystem have acknowledged that institutions seeking stablecoins and yield are conducting increasingly rigorous due diligence, prioritizing robust risk management and protocol resilience over short-term yield. This institutional shift is believed to be a primary driver of USDS growth in 2026 thus far. To further support this demand, Sky Governance is restructuring its capital strategy with the primary objective to accelerate the growth of the protocol's Aggregate Backstop Capital (ABC).

Sky Governance is executing this transition across three distinct stages to systematically shift from short-term yield distribution to long-term capital retention and protocol robustness:

• Stage 0 (Current State & March Adjustments): On March 14, governance executed a critical reduction in the programmatic SKY buyback program, dropping the allocation from 75% of net profits down to 7.5% (establishing a new baseline of approximately $37,600 per day). Additionally, the protocol now funds SKY staking rewards directly from its native SKY reserves rather than active USDS revenue. These combined mechanics ensure that the vast majority of incoming USDS revenue accumulates directly into the ABC rather than being distributed to SKY stakers.
  
  
• Stage 1 (Immediate Staking Adjustments): To further accelerate the ABC toward its $125 million target (up from the current $50 to $60 million range), Sky Governance is reducing SKY staking rewards from 75% to 50% of monthly net profits. By lowering these payouts, the protocol extends its SKY reserve runway by 1.5x.
  
  
• Stage 2 (Long-Term Roadmap): When native SKY reserves eventually reach 15 days of runway, the protocol will transition to a fully revenue-funded model. Net profits will then be distributed equally across four channels:
  
  • 25% to SKY buybacks distributed to SKY Stakers
  • 25% distributed in USDS to SKY Stakers
  • 50% retained in the ABC to support ongoing buffer growth.
    

Sky Governance continues to evaluate the best use of protocol profits and will remain flexible as the market evolves.

$70 million in USDS Genesis Capital: Sky Governance approved $70 million in USDS Genesis Capital in March to bootstrap the next wave of Sky Agents, including allocations to Keel, Amatsu, and Ozone. Full allocation details and mandate breakdowns here.

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Operational Updates & Integrations

Privy Integration: Privy, a Stripe-owned wallet infrastructure provider, natively integrated the Sky Savings Rate (sUSDS) into its developer tools. Builders using Privy can now seamlessly enable their user bases to onboard USDS and access the Sky Savings Rate directly within their applications. This integration significantly expands the protocol's distribution capabilities and reaches mainstream audiences well beyond crypto-native users.

Sky Ecosystem Website Restructuring: Sky has launched skyeco.com, a newly dedicated domain focused on comprehensive coverage of Sky Ecosystem. All governance forums, developer documentation, and community resources have been migrated to this central hub. Concurrently, sky.money has been streamlined to serve exclusively as the product interface for Sky Protocol, providing users with direct access to Sky Protocol enabled stablecoin yields and SKY staking features.

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Looking Ahead

Q1 2026 Financial Report & Quarterly Briefing: Targeted for release in late April 2026. In conjunction with the written report, the ecosystem will host its inaugural Quarterly Financial Review call to walk ecosystem participants through the latest operational metrics, protocol health, and fundamental performance.

Live Financial Dashboard Launch: To further enhance institutional transparency, Sky Ecosystem will launch a new, comprehensive financial dashboard in April. This tool will provide real-time, onchain visibility into the protocol's active profit and loss (P&L) statements, balance sheet, and diversified revenue streams.

Grove Genesis Capital: Grove is scheduled to receive its genesis capital deployment of $25 million in April, marking the next major expansion of the protocol's agent network.

Key Leadership Appointments: The Sky Frontier Foundation has made two leadership appointments. John Conneely joins SFF as Head of Business Development to drive strategic integrations and USDS adoption. Additionally, Jan Delegos has been appointed as Head of Risk to strengthen risk assessment and operational oversight across the ecosystem.

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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

The content provided in this newsletter is for informational and educational purposes only and does not constitute legal, financial, investment, tax, or other advice. No part of this document is intended as, or should be construed as, an offer, solicitation, or recommendation to buy or sell any token, security, or other financial instrument, or to engage in any transaction or strategy, nor to form the basis of any investment or other decision. Views expressed are as of the issue date, based on the information available at that time, and may change based on market or other conditions. The content does not purport to be a complete description of the markets or developments referenced herein. The information has been obtained from sources considered to be reliable, but we do not guarantee its accuracy or completeness. All protocol data sourced from info.skyeco.com unless otherwise noted.