Sky Ecosystem: September Financial & Operational Update

Welcome to the 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

September was defined by institutional adoption across the Sky Ecosystem. Galaxy added sUSDS to its corporate balance sheet and approved it as institutional loan collateral, while the Grove and Galaxy credit facility built on Sky Protocol continued to scale. The first SKY burn under Stage 2 linked protocol performance directly to a reduction in SKY supply.

Key Highlights:

• Galaxy adds $100M of sUSDS to its balance sheet: Galaxy added $100 million of sUSDS to its corporate balance sheet, approved sUSDS as eligible collateral across its institutional trading business, and purchased SKY.
• First SKY burn completed: 2.86 million SKY, purchased on the open market using 5% of monthly Net Protocol Surplus, was permanently removed from circulation.
• Grove and Galaxy facility reaches 75% utilization: The $500 million warehouse lending facility has financed $375 million in overcollateralized institutional loans using USDS since launching on July 15.

Sky Protocol Financials & Onchain Metrics

Total Stablecoin Supply reached $9.70 billion at September 30, up 27.6% year over year. Protocol Collateral grew to $11.41 billion, up 25.3%. Gross Protocol Revenue was $30.80 million, up 49.7% from September 2025.

Net Protocol Revenue was $12.32 million, compared to -$5.41 million a year earlier. Part of that change reflects how expenses are classified: September 2025 included $14.40 million of legacy Operating Expenses, which are now largely inactive.

Remitted to Sky Reserves (the surplus the protocol keeps minus expenses and the revenue allocation) was $7.15 million, compared to -$17.26 million in September 2025. September was the first full month of Stage 2 of the buybacks framework. Revenue Allocation (the SKY buyback and the USDS paid to SKY stakers) rose to $5.08 million from $2.48 million in August, so a larger share of revenue went to SKY holders before the remainder was remitted to Sky Reserves.

Capital Markets Activity

Galaxy adds sUSDS to its balance sheet and approves it as institutional loan collateral

Galaxy added $100 million of sUSDS to its corporate balance sheet, making it one of the first public companies to hold sUSDS on its balance sheet. Galaxy also approved sUSDS as eligible collateral across its institutional lending business, which carries an average loan book of $1.4 billion and serves more than 1,600 trading counterparties. Clients posting sUSDS as collateral continue to earn the Sky Savings Rate on their full position for the duration of the loan. Galaxy also purchased an undisclosed amount of SKY.

Grove and Galaxy $500M warehouse facility reaches 75% utilization

Grove, a Sky Agent, provides USDS liquidity under a Sky Governance-approved mandate for Galaxy to originate and service institutional loans secured by digital assets. Since launching on July 15, the facility has financed $375 million in senior secured, overcollateralized loans, including its latest $71 million loan. Loans are secured by Bitcoin and Ethereum, with custody through Anchorage Digital and BitGo. You can read more about this allocation in the Skyeco.com case study on how the structure works.

Sky Agent Spark Pioneers the Stablecoin FX layer

Spark, a Sky Agent, outlined how its Stablecoin FX Layer uses USDS as a shared liquidity base connecting PYUSD, USDT, RLUSD and USDC. Since launching on June 25, the FX Layer has processed more than $12 billion in cumulative volume. Spark also plans to deploy $375 million to support RLUSD across capital allocation, exchange liquidity and credit.

Standard Chartered initiates coverage of SKY

On September 11, Standard Chartered's Global Head of Digital Assets Research, Geoff Kendrick, initiated research coverage of the SKY token, with a thesis centered on USDS supply growth.

Governance & Risk Management

First SKY burn completed under Stage 2 of the Buybacks Framework

On September 13, the first SKY burn was completed. 2.86 million SKY, purchased on the open market using 5% of monthly Net Protocol Surplus, was permanently removed from circulation. Under the Stage 2 capital-allocation framework set by Sky Governance, monthly Net Protocol Surplus is allocated as follows:

• 22.5% to SKY buybacks for SKY Staking Rewards
• 22.5% to USDS Staking Rewards
• 5% to SKY buybacks and burns
• Up to 50% to the Surplus Buffer

As Net Protocol Surplus grows, the capital allocated to buybacks and burns increases accordingly.

Operational Updates & Integrations

Spark active loans reach $2.9B

Active loans on Spark, a Sky Prime Agent, grew approximately 190% over the past 180 days to $2.9 billion, the fastest growth among the top 10 lending protocols tracked by Token Terminal.

RLUSD/USDS pool surpasses $1B in activity

Spark's RLUSD/USDS pool, part of its Stablecoin FX Layer around USDS, surpassed $1 billion in activity less than one month after launch, averaging approximately $40 million in daily volume.

SparkLend USDS borrowing reaches new high

USDS borrowing on SparkLend exceeded $800 million, an all-time high, following a 64% increase over 30 days.

Cumulative savings distributions pass $483M

More than $292 million in yield has accrued to sUSDS holders through the Sky Savings Rate since inception, in addition to $191 million distributed through the legacy Dai Savings Rate.

Looking Ahead

Q3 Quarterly Report and Insights Call

The Sky Ecosystem Q3 Quarterly Report and Insights Call will both be released later this month. Be on the lookout for a deeper dive into Sky’s progress over Q3 and looking ahead to what’s on the horizon for the Sky Ecosystem. Alongside it, the Foundation will host its Q3 Quarterly Insights Call to walk ecosystem participants through those results. The call will be recorded, and participants can pre-submit their questions through the form here. Submissions close October 28.

Sky Protocol is the first stablecoin protocol rated by both S&P and Moody's

S&P Global Ratings published its annual review assessment of Sky affirming their rating based on advancing the development of the Prime Agent Ecosystem, strengthening its treasury management function, expanding the financial reporting and transparency and more. Additionally, Moody’s assigned its first counterparty risk rating to a stablecoin protocol with Sky. A big first step in providing institutional allocators established frameworks to evaluate Sky Ecosystem’s credit profile.

Sky Ecosystem in Singapore

The Sky Ecosystem team attended TOKEN2049, Blockworks DAS, Yield Summit, and Capital Summit in Singapore. John Conneely joined Sam MacPherson, CEO of Spark, and Alex Lim, Head of APAC at LayerZero, at Capital Summit to discuss stablecoin growth across Asia and models that support institutional adoption. Greg Feibus spoke at Yield Summit. The upcoming October monthly update will dive into any insights that came out of those events and appearances.

Sky Reserves progress toward the Solvency Reserve target

Sky Reserves continue to move toward the $150 million Solvency Reserve target (sitting at $85.08M at month-end).

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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.

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