PANews reported on May 14th that according to CoinDesk, a report by a Sky contributor from Steakhouse Financial shows that the DeFi protocol Sky (formerly MakerDAO) had a net loss of $5 million in the first quarter, a significant reversal from the $31 million profit in the last quarter of last year. The main reason for the loss was a 102% year-on-year surge in interest paid to stablecoin holders, which is directly related to its strategy of promoting the new stablecoin USDS to replace Dai. Sky co-founder Rune Christensen confirmed that to attract capital inflows, the USDS savings rate was as high as 12.5% (reduced to 4.5% in February), leading to a surge in interest expenses. Currently, the USDS rate is still higher than Dai, but PaperImperium, a governance liaison at blockchain research firm GFX Labs, pointed out: "USDS has failed to create new demand, it only shifted Dai holders who originally accepted zero interest to high-interest products."
Launching USDS is a core measure of Sky's "ultimate plan" aimed at creating a more compliant institutional-level stablecoin. Although the total supply of USDS and Dai increased by 57% this quarter, it mainly came from the $450 million pledged funds from the synthetic dollar protocol Ethena. It is worth noting that Ethena has recently transferred part of its reserves from USDS to USDtb, which is supported by BlackRock, which may reduce Sky's interest burden.
