🥛 SKY is beating BTC in 2025 🥊

GM, this is Milk Road PRO, your crypto chauffeur – we help steer you safely through the crypto market’s hills and valleys.

Today, we’re diving into one of the top-performing crypto assets of the year.

No. It’s not Bitcoin.

And no, it’s not a random low-cap coin riding a wave of hype.

We’re talking about a real crypto veteran that has been making serious moves this year.

Say hello to Sky ($SKY), formerly known as Maker ($MKR).

Sky is up 15.8% year-to-date, outpacing Bitcoin, which is only up 7.5% while most of the crypto market is yet to break even in 2025.

The reason behind Sky’s strong performance?

Simple: Buybacks. 

Since February 24th (this year), Sky has been buying back an average of 8 million $SKY tokens every single day.

👉 That’s around $600,000 in daily buy pressure, consistently pushing the price upward and shrinking supply. $SKY is up 48% since the buybacks were first announced. 

Now here’s the big question everyone’s asking: Is this pace sustainable?

No, it’s not.

Sky’s profits over the last 3 months, when annualized, sit at more than $115 million as you can see below. 

But to keep up the above pace of buybacks (roughly $600K per day), they’d need to almost double that to around $216 million a year.

So unless profits grow fast, this level of buyback pressure won’t last forever. But here’s the thing—we’re not too concerned about how long they can keep up those buybacks.

What we really need to be asking is:

• How’s the core business doing?

• What makes their product unique and defensible?

• Are there tailwinds that could boost profits? 

• What are the key challenges? 

At the end of the day, the answers to these questions are what really shape Sky’s long-term value.

It’s not just about daily buybacks or short-term price action. It’s about how well the business performs, how it handles challenges, and how it takes advantage of future opportunities.

That’s what will decide where $SKY goes from here.

And if that sounds like something you’re into – good news: that’s exactly what we’re diving into today.

We’re breaking down Sky’s business, what makes it stand out, and where it could be headed next.

All in hopes of answering the question: Is $SKY still a good investment today?

Alright, let’s get into it!

SKY’S BUSINESS TODAY

If you’re new to Sky and not sure what it’s all about, check out our previous report here. It’s a quick and easy read that will get you up to speed fast. 

For those of you already familiar with Sky, let’s jump straight into their current business operations, because a lot has changed since our last update, and it’s worth taking a fresh look.

Let’s start with the stablecoin supply. It’s the engine behind their revenue, and tracking its growth tells us a lot about how the business is performing.

Right now, the stablecoin supply is sitting at $7.15 billion. That’s nearly $2 billion less than its all-time high on February 18th.

It’s a noticeable drop, but there are good reasons for that: 

• Back in February, the savings rate on $sUSDS was a juicy 8.75%. Today? It’s down to 4.5%, cutting the incentive for users to hold it.

• On top of that, Ethena, which previously held around $1.5 billion in $sUSDS, now has direct access to U.S. Treasury yields, so they reduced their exposure to $0.4 billion.

So overall, when you take Ethena out of the equation, Sky’s supply has really only dropped by about $1.1 billion (-12%) and that’s actually a very positive sign.

Because Sky is now offering yields at 4.5% that are more or less in line with the U.S. Treasuries. In that scenario, you'd expect much bigger outflows as capital chases the safest return.

But that’s not happening.

👉 This suggests users are playing the long game: they understand that Sky consistently delivers better risk-adjusted returns over time, always outperforming Treasuries, and they’re not looking to jump in and out for short-term gains.

In short, people trust the system and that’s a strong vote of confidence for Sky’s long-term value.

But keep in mind—the chart above includes all stablecoins under Sky:
$DAI, $sDAI, $USDS, and $sUSDS.

If we focus on $sUSDS alone, which is Sky’s core product, we see a very similar trend.

If we exclude the Ethena withdrawal, $sUSDS only saw about a 9% outflow from its total supply since February.

Right now, only ~45% of the stablecoin supply is locked in savings products ($sUSDS, $sDAI), so Sky only needs to pay yield to those holders. 

That leaves the remaining 55% of the assets untouched, meaning Sky can use them to earn extra yield and keep the profits.

We expect this ratio to increase over time, but it’s unlikely to ever reach 100%. 

That’s because some stablecoins are lost (or access to them is), some are being used for payments, and others are just temporarily sitting idle before being moved into savings products.

But the large amount of stablecoins that haven’t been moved into their savings products yet is one of the main reasons Sky is doing so well—not just in terms of revenue, but also when it comes to profit. 

Their revenue keeps climbing and their profits are growing right alongside it! 💪

So if they’re doing so well, why make any changes at all? 

That’s a great question and it deserves a deeper explanation.

THE CURRENT STABLECOIN LANDSCAPE

There’s no doubt that stablecoins are one of the best products in all of crypto. Just look at the growth in total supply.

At the start of 2024, stablecoins had a total supply of about $130 billion. 

Fast forward nearly a year and a half, and another $114 billion has been added—bringing the total in circulation to $244 billion today. 

It’s a clear sign of just how much confidence and demand stablecoins have earned in the market over the years. 

But we’re not here to lay out the bull case for stablecoins today. 

It feels like it is quite obvious at this point, when banks, payment companies, fintechs, and just about everyone else are talking about using or launching stablecoins. 

What really stands out now is the rise of yield-bearing stablecoins (YBS). 

Because the market for non-yield stablecoins is already crowded, with Tether and Circle firmly in control. And we don’t see their dominance changing anytime soon—if anything, their position is only getting stronger.

But it’s a whole different story when it comes to yield-bearing stablecoins. This space is just getting started and it's where the real disruption is beginning to take shape.

Since the start of 2024, the supply of yield-bearing stablecoins has grown nearly 7x and we believe this rapid growth will continue. 

Once people start holding stablecoins, the natural next step for many is to look for ways to earn yield and yield-bearing stablecoins are often the best choice. 

👉 So, the larger the total stablecoin market grows, the bigger the potential market for YBS and for Sky too.

With YBS currently making up only 4% of the total stablecoin market, there’s plenty of room for their share to grow. 💪

Sky sees this massive potential ahead. That’s exactly why they’re making changes now. 

They’re positioning themselves to capture as much of this upside as possible in the fast-growing yield-bearing stablecoin space.

Now let’s take a look at how Sky plans to capture that growth and lead the way in the yield-bearing stablecoin space.

SKY BUSINESS MODEL TODAY 

Before we look into the future, we want to explain their current business model. Here is a simple, easy-to-understand diagram.

Sky’s core product is $sUSDS – a yield-bearing stablecoin. And like any product, it needs to figure out two key things: demand and supply.

PS: We are going to ignore Spark for now, but we will get into it later. 

Demand

This part is straightforward. These are the users who want to hold stablecoins and earn yield ($sUSDS). 

Beyond individuals using Sky’s apps directly, there’s even more potential in third parties integrating the product including apps, wallets, fintechs, funds, and so on.

This sounds great, but it might be a bit naive. Sure, Sky likely has one of the best products out there, but that doesn’t guarantee that all the players with existing user bases will automatically push new demand toward $sUSDS. 😮‍💨

Supply

A similar challenge exists on the supply side, Sky is the only one managing the yield strategies.  

This creates a bottleneck and limits how much the supply side can really grow. In other words, there’s only so much yield Sky alone can generate while still offering competitive savings rates and keeping risks under control.

In simple terms: Sky has a great product, but it lacks the distribution and scale needed to grow it into a supply of tens-of-billions while still delivering the best risk-adjusted yield in the space.

That's the current state of Sky. They're still doing extremely well, but it won't be enough to maintain their position in the future. ✋ 

But they are aware of that and that’s why they want to tap into the potential ahead by transforming into a major stablecoin platform. 

And guess what? That transformation is already happening. So let’s zoom in on that.