Introduction
In a historic first for decentralized finance (DeFi), S&P Global Ratings assigned a “B–” issuer credit rating to Sky Protocol, formerly known as Maker Protocol. This marks a key milestone in how legacy finance evaluates blockchain-native platforms, especially stablecoin issuers.
Background: Rating the Untouchable
Until now, credit ratings were exclusively the domain of governments and corporations. DeFi’s decentralized, transparent nature felt beyond the scope of formal credit assessments. That changed in 2023 when S&P extended its stablecoin issuer assessments—initiated to evaluate fiat-peg maintenance—to platforms like Sky Protocol.
What Happened
On August 8, 2025, S&P officially assigned Sky Protocol—and its stablecoin liabilities like USDS, DAI, sUSDS, and sDAI—a “B–” rating, citing centralized governance, high depositor concentration, weak capitalization, and regulatory uncertainty as key vulnerabilities. Yet the rating also reflects belief in the protocol’s ability to meet obligations under normal conditions.
S&P also rated the stability of USDS at a “4” (on a 1–5 scale, where 1 is strongest)—a “constrained” rating reflecting risks to its dollar peg.
Governance & Capitalization Risks
S&P pointed out that Rune Christensen, Sky’s co-founder, still holds nearly 9% of governance tokens, and voter turnout remains low—signaling centralization in decision-making. The protocol’s risk-adjusted capital ratio stands at just 0.4%, leaving a thin buffer for potential financial stresses.
Expert Reaction
Andrew O’Neil, S&P’s digital assets analytical lead, emphasized that while Sky can meet its obligations now, it remains vulnerable in adverse conditions. Meanwhile, Sky’s team welcomed the process as an exercise in bridging traditional counterparty risk models and DeFi-specific threats like smart contract and oracle vulnerabilities.
Impact on DeFi and Investor Sentiment
- For Sky Protocol: The rating may bolster institutional confidence and catalyze improvements in governance, reserves, and transparency.
- For DeFi: This precedent could encourage other platforms to seek formal ratings, potentially improving industry standards—but also raising centralization pressures.
- For regulators and investors: It highlights growing intersections between traditional markets and DeFi, likely prompting closer oversight.
Future Outlook
Sky Protocol must address its weak capital buffer and governance centralization to pursue rating upgrades. The broader DeFi sector may follow by adopting more structured frameworks—potentially reshaping how protocols are financed and governed.
