What Is Fixed Yield?

The Sky Savings Rate is designed to adjust over time based on Sky Governance and the needs of Sky Protocol. That variability is a feature for capital to stay flexible, and sUSDS holders to be able to access the SSR for as long as they hold.

Though, what that variable rate doesn't give you is the advantage of certainty. A known return at a known date.

Sky.money has introduced Fixed Yield: a way to fix today's rate to a market-set maturity date. The rate is fixed if you hold to that date using Pendle Protocol on top of sUSDS.

Fixed Yield is a way to access a rate set on entry for sUSDS, for those who want fixed yield on their stablecoins. No surprises.

How Fixed Yield works

Sky.money will open Fixed Yield markets on Pendle periodically with a published maturity date. You can supply USDS, USDC and even sUSDS to the market of your choice at any time before maturity. The rate available at any given moment is set by the market as it reflects what buyers and sellers are currently pricing for that date. The rate you'll get at maturity is visible the moment you supply.

It just takes four steps:

1. Sky.money opens a new Fixed Yield Pendle v2 market on the Sky.money app and publishes the maturity date.
2. You supply either USDS, USDC or your existing sUSDS to the market. The rate currently available for the remaining time is the rate you’ll receive on maturity.
3. You hold the position until the displayed date.
4. At maturity, your position pays out the return that was set when you supplied. You redeem your stablecoins at the fixed rate.

If you need your USDS back before the maturity date, you can exit by selling your position at the current market price. That price can be higher or lower than where you supplied, depending on how rates have moved in between.

Is this an alternative to sUSDS?

Quite the contrary. While a lot of people like to contrast fixed vs variable term mechanisms, they’re just two ways to access the same benefit for different use cases.

sUSDS gives you the Sky Savings Rate as it moves. The yield compounds in your wallet, and you can convert back to USDS or USDC whenever you choose. The trade is flexibility for variability: the rate can adjust over time if the SSR’s parameters are modified by Sky Governance while you hold.

Fixed Yield gives you a known return at a market-set maturity date. Both products at their core provide you with access to the Sky Savings Rate. The difference is what each optimizes for either variable yield with flexibility, or known return at a known date.

If you have USDS or USDC you don’t need to touch until the next maturity date, Fixed Yield lets you set today's rate to that date. If your stablecoins need to stay flexible, sUSDS is a convenient path.

Where the yield comes from

Both sUSDS and Fixed Yield provide access to the Sky Savings Rate through different mechanisms. The Sky Savings Rate is a governance-set rate paid from Sky Protocol revenue. Sky Protocol earns revenue from multiple sources, the largest of which is providing USDS liquidity to the Sky Agent Network. Sky Protocol has been operating these mechanics for more than eight years, since when it used to be MakerDAO, through every major crisis DeFi has produced, without a single core protocol exploit.

The Fixed Yield market itself is built on Pendle v2. Buying into a Fixed Yield market is buying the right to redeem at maturity at a known rate set today. When you hold this position in your wallet, you’ll see the Pendle token “PT-sUSDS”, this is the onchain representation of what we call “Fixed Yield” in the Sky.money interface.

Common questions