S&P Global Ratings issued a “B-” credit rating to Sky Protocol (formerly MakerDAO) on August 8, 2025, marking the first time a major credit rating agency has assessed a decentralized finance protocol.
The rating is part of S&P’s stablecoin stability assessment program initiated in 2023 to evaluate stablecoins like Sky’s USDS and DAI, and tokens like sUSDS and sDAI, can keep their value steady compared to fiat currency like the U.S. dollar.
According to CoinMarketCap, Sky’s USDS stablecoin, with a market capitalization of $5.36 billion, received a “4” (constrained) stability rating from S&P for keeping its value equal to the U.S. dollar. The agency’s scale ranges from 1 (very strong) to 5 (very weak) for stablecoin stability assessments.
Sky Protocol is a platform where users can borrow against cryptocurrency collateral, with USDS serving as the primary stablecoin for these transactions.
S&P identified several risk factors that influenced the rating, according to the assessment report. The agency cited concentration risk from large depositors, governance centralization among a small group of participants, and significant reliance on co-founder Rune Christensen, who controls nearly 9% of voting power.
Additional concerns include regulatory uncertainty surrounding DeFi operations and a low capital buffer, with Sky maintaining only a 0.4% capital ratio as of July 27.
Despite identified risks, Sky has had a few losses and steady earnings since 2020. Andrew O’Neil from S&P said the “B-” rating means Sky can pay its debts now but could struggle under adverse conditions.
DeFi-Specific Challenges
Sky’s Asset-Liability Committee participated in the rating process, addressing both traditional financial risks and DeFi-specific vulnerabilities including smart contract risks and governance mechanisms.
S&P’s assessment resulted in an anchor rating of “bb” for Sky, below the “bbb+” anchor rating typically assigned to U.S. banks, reflecting the additional risks associated with decentralized protocols.
As S&P’s ratings for stablecoins, USDC is rated 2 (strong), and Tether and USDS are rated 4 (constrained). The rating of Protocol underscores the potential benefits and challenges of decentralized finance (DeFi), paving the way for further integration with traditional finance.
Also Read: Arthur Hayes Adds $7.45M in ETH, Boosts DeFi Tokens Holdings
