Standard Chartered has started coverage of Sky, the DeFi protocol formerly known as MakerDAO, with a forecast that its SKY governance token could reach $0.325 by the end of 2028, roughly five times its stated price of about $0.065. The projection depends on Sky expanding its USDS stablecoin supply, increasing lending activity across its ecosystem, and directing more protocol income to token holders through staking rewards and buybacks.
In the report, Geoffrey Kendrick, Standard Chartered’s global head of digital assets research, characterized Sky as a “DeFi federal bank.” The analogy places Sky in the role of a central issuer of USDS and DAI, while affiliated entities borrow those stablecoins at a base rate and deploy them in lending and yield-generating strategies.
That structure gives Sky a revenue model closer to a wholesale lending platform than a conventional decentralized exchange or a token whose value relies mainly on trading activity. Sky earns income when ecosystem agents borrow USDS, as well as from reserves and legacy lending operations connected to DAI.
Three agents account for $5.9 billion in USDS borrowing
Kendrick identified Spark, Grove and Obex as Sky’s three principal ecosystem agents. Together, they have borrowed $5.9 billion in USDS and pay Sky a base interest rate currently set at 3.8%, according to Standard Chartered.
Spark is focused on crypto lending, including deployments through protocols such as Aave and Morpho. Those platforms allow lenders and borrowers to interact through smart contracts, with interest rates typically responding to supply and demand for crypto collateral and stablecoin liquidity.
Grove has a different mandate, allocating capital to real-world assets. Kendrick cited products associated with BlackRock, Janus Henderson and Apollo among the types of traditional financial instruments accessible through Grove’s strategy. Such allocations can include tokenized funds or other blockchain-linked representations of conventional assets, which may generate returns from underlying securities rather than crypto lending alone.
Obex is intended to bring specialist capital managers into Sky’s framework, widening the strategies that can be run with borrowed USDS. The model gives Sky a route to scale its balance sheet without the core protocol itself making every allocation decision.
Sky also receives income from USDC held in its peg stability module, an arrangement designed to support swaps between USDS and USDC. Additional revenue comes from older DAI lending vaults, according to Kendrick. These sources leave the protocol with a mix of crypto-native lending income, stablecoin reserve income and returns connected to tokenized traditional assets.
Buffer growth could unlock more token-holder distributions
Standard Chartered’s price model is built around the amount of protocol value that eventually reaches SKY holders. Kendrick estimated that the value distributed through staking rewards and token buybacks could increase fivefold by the end of 2028, matching the bank’s projected rise in the token price.
The first stage would depend on Sky building a larger financial reserve before raising the share of earnings sent to token holders. Sky’s aggregate backstop capital, its reserve buffer, stood at about $90 million in the report. Kendrick estimated that it could reach $150 million in roughly eight months if it continues growing at the current pace.
A larger buffer would give Sky more protection against lending losses, reserve volatility or other balance-sheet stress. For a stablecoin issuer that earns from deploying and lending its liabilities, the size of that buffer can determine how much income the protocol can safely distribute rather than retain.
Kendrick wrote that distributions available for SKY staking rewards and buybacks could double if the buffer reaches $150 million and also equals 1.5% of outstanding USDS supply. The two conditions matter because a growing stablecoin supply also increases the capital base Sky would need to support.
The model places greater weight on staking rewards than on repurchases. SKY’s staking yield was estimated at 4.2%, and Kendrick assumed it would remain near that level through the forecast period. That makes SKY’s valuation more dependent on whether protocol income can sustain distributions than on the market impact of buybacks.
Unused lending capacity underpins the growth case
The second stage of the bank’s forecast relies on more borrowing by Spark, Grove and Obex. Their combined borrowing limits total $17.5 billion, nearly three times their current $5.9 billion in USDS borrowing, Kendrick wrote.
If those entities borrow closer to their limits and the interest spread paid to Sky remains stable, the protocol’s income could increase by another two to three times, according to the report. That assumption places much of the forecast’s weight on demand for USDS-funded strategies rather than on a simple increase in cryptocurrency prices.
The model also assumes Sky can continue attracting borrowers that have profitable uses for USDS. A higher borrowing ceiling does not by itself produce revenue; agents need opportunities that generate enough return to pay Sky’s base rate while retaining a margin for themselves.
Kendrick identified slower-than-expected growth in yield-bearing stablecoins as the principal risk to the forecast. Sky’s model depends on stablecoin users and professional allocators wanting dollar-denominated assets that can be borrowed, exchanged and deployed across on-chain markets or tokenized funds.
Standard Chartered separately expects the stablecoin market to reach $2 trillion by the end of 2028. In Kendrick’s framework, Sky’s ability to capture part of that expansion would determine whether its lending agents can scale toward their approved capacity and whether more revenue can be passed to SKY stakers.
The report projected that SKY would broadly match Ether’s gains and outperform Bitcoin through the end of 2028 under the same assumptions. That comparison reflects a view that Sky’s token could benefit from rising protocol cash flow, rather than moving solely with the broader crypto market.
Want deeper DeFi context? Learn how DeFi works and how lending, stablecoins, and yield shape token value.
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