High-performance risk capital
Fuel the SKY Staking Engine. Support ecosystem leverage and earn rewards for providing essential liquidity to SKY token holders.
stUSDS yield is generated dynamically through SKY-backed lending within Sky Protocol and is dependent on the Utilization Rate. Sky.money does not control, set, or guarantee the rate. All yields are variable.
stUSDS yield is generated dynamically through SKY-backed lending within Sky Protocol and is dependent on the Utilization Rate. Sky.money does not control, set, or guarantee the rate. All yields are variable. View more details here.
How stUSDS generates yield
Isolated risk capital framework
stUSDS offers a high-performance yield profile designed for expert users. When you supply USDS into the stUSDS module, your capital is used to fund SKY-backed borrowing. You are effectively providing the liquidity that allows SKY stakers to stay liquid while they earn and govern.
Dynamic utilization-based returns
The stUSDS rate scales dynamically based on the utilization of the pool. As borrowing demand from SKY stakers increases, so does your return. When your capital is not being borrowed, it automatically earns the Sky Savings Rate (SSR). This ensures your money is always working, regardless of borrowing demand.
stUSDS features set
Expert-level risk & reward
stUSDS is designed for those who understand lending dynamics. Your capital carries the specific risk of SKY price volatility, and the higher yield is your compensation for that specific exposure.
Dynamic borrowing capacity
The system is self-regulating by Sky Protocol. Borrowing capacity for SKY stakers expands automatically when new USDS is supplied and contracts when it leaves, ensuring the system remains structurally sound.
Isolated risk infrastructure
stUSDS is not connected to the Sky Savings Rate (sUSDS). This ensures that the risks associated with SKY-backed lending are contained, protecting the broader protocol’s stability.
Composable via Vaults
Beyond the native module, stUSDS acts as a collateral asset. You can deploy stUSDS across Vaults (paired with USDS, USDC, or USDT) to access even more advanced DeFi strategies.
Frequently asked questions about stUSDS
What is stUSDS?
stUSDS is the "Risk Capital" token of the Sky Protocol. When you supply USDS into the stUSDS module available in the Sky.money platform, your capital is used to fund loans for SKY stakers. In exchange for providing this essential liquidity, the Sky Protocol provides you with a premium yield that is typically higher than the standard Sky Savings Rate.
Why is this called "Expert Mode"?
Unlike sUSDS, which is designed for stability, stUSDS involves specific risk of SKY price volatility. You are essentially acting as the lender to the protocol’s governance participants. This requires an understanding of lending markets, utilization rates, and the volatility of the underlying collateral (SKY).
How does the "Smart Burn Engine" affect me?
The Smart Burn Engine uses protocol surplus to programmatically buy back SKY tokens. This process supports the value of the collateral backing the loans you fund, helping to maintain a healthy ecosystem and driving the borrowing demand that fuels your stUSDS yield.
Can I use stUSDS in other DeFi apps?
Absolutely. stUSDS is a composable ERC-4626 token. You can use it as collateral in Vaults available in Sky.money and provided by Morpho to access further liquidity or more advanced yield strategies, all while continuing to claim your share of the SKY borrowing fees.
How is the stUSDS yield generated?
The yield is dynamic and depends on how your capital is being used. When SKY stakers borrow your supplied USDS, you earn from the SKY Borrow Rate (interest paid by borrowers to the Sky Protocol). When your capital is not being borrowed, it automatically earns the Sky Savings Rate (SSR). This ensures your provided funds are always working, regardless of borrowing demand.
What are the risks of holding stUSDS?
The primary risks include SKY price volatility and potential "bad debt" if liquidations do not cover borrowed amounts. Additionally, because the pool is often highly utilized (targeted at 90%), there may be temporary withdrawal constraints during periods of extreme demand until new liquidity enters or loans are repaid.
Does stUSDS risks influence other Sky.money products?
From a risk perspective. stUSDS is structurally isolated so that any risks associated with SKY-backed lending, like collateral volatility, are contained within the stUSDS pool. USDS and sUSDS holders are completely separate, while Risk Capital vaults using stUSDS could be influenced.
How do I withdraw my USDS?
You can initiate a withdrawal through the Sky.money interface at any time. Your stUSDS will be converted back to USDS plus accrued interest. Please note that withdrawals depend on "unutilized liquidity" in the pool; in rare cases of 100% utilization, you may need to wait for borrower repayments.
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