Sky Lending is the borrowing side of the Sky protocol, the system that succeeded MakerDAO. Users lock approved crypto as collateral and generate USDS, Sky's stablecoin, as an overcollateralized loan against it. In our DeFi protocols group it ranks tenth of fifteen, with a score of 7.51.
How does Sky Lending work?
Rather than borrowing an asset another user supplied, you mint a stablecoin directly against your locked collateral. You must keep the collateral worth well above the debt; if its value falls past the required ratio, the position can be liquidated to cover the outstanding USDS. Repaying the loan and any accrued fee unlocks your collateral. This mint-against-collateral model is the same mechanism that made its predecessor a foundation of DeFi.
How is this different from a pooled money market?
In a pooled market such as a standard money market, you borrow assets that other users supplied, and rates float with supply and demand. Here, the stablecoin is created on demand against your collateral rather than drawn from a lender's deposit. The practical implication is that your obligation is to a system-set fee and collateral ratio, not to a fluctuating pool of counterparties, though you remain fully exposed to liquidation if collateral falls.
What does our data show?
Our measurements record roughly $5.7B in total value locked, placing it among the larger protocols in this set. We track it on a single chain, with two audits on record. We did not find a dedicated public status page. Our data set does not include a reliable on-chain age for this specific deployment, so we do not state one.
Risks to understand
- Liquidation risk: a falling collateral price can force the sale of your collateral, usually with a penalty.
- Stablecoin peg risk: USDS aims to hold a stable value, but no stablecoin peg is guaranteed.
- Oracle risk: collateral is valued by price feeds that must be accurate and timely.
- Governance risk: collateral types, fees and parameters are governed and can change.
Who is it for?
Sky Lending fits users who want to unlock liquidity from their holdings by borrowing a stablecoin without selling, and who are comfortable managing a collateralized debt position. It is less suitable for those seeking to lend idle assets for yield through this specific function, or anyone who cannot monitor collateral levels during volatility.
We assess scale, audits, chain reach, latency and status transparency. We do not measure stability fees or savings rates; check those directly in the app.