Standard Chartered Bank has initiated coverage of DeFi platform Sky, formerly MakerDAO, forecasting that its SKY token will rise fivefold to $0.325 by the end of 2028 from about $0.065 currently.
Geoffrey Kendrick, the bank’s global head of digital assets research, described Sky as “DeFi’s federal bank” because it issues stablecoins, creates a governance framework and charges a wholesale rate of interest to borrowers. He said Sky would be akin to a central bank in the off-chain world, issuing currency in the form of USDS and DAI, setting governance rules for agents, and lending money at wholesale interest rates.
The report highlighted that Sky’s three main agents — Spark, Grove and Obex — have borrowed a combined $5.9 billion in USDS. Spark focuses on crypto lending through protocols such as Aave and Morpho, Grove allocates to real-world assets including products from BlackRock, Janus Henderson and Apollo, and Obex brings specialist capital allocators into the Sky ecosystem. Sky also earns income from USDC held through Coinbase in its peg stability module and from its older DAI-related crypto lending vaults.
Kendrick expects growth in Sky’s USDS stablecoin business and a larger share of income going to SKY token holders through staking rewards and buybacks. Sky currently has about $90 million in its reserve buffer, and Kendrick estimated the buffer could reach $150 million in about eight months. If it also reaches 1.5% of outstanding USDS supply, the amount available for staking rewards and buybacks could double. Combined borrowing limits of $17.5 billion across Spark, Grove and Obex could generate another two- to threefold increase in income assuming interest spreads stay constant.
The forecast assumes SKY’s staking yield, currently 4.2%, stays around that level. Kendrick continued to forecast the overall stablecoin market will reach $2 trillion by end-2028, but noted the main risk would be if yield-bearing stablecoin growth is slower than expected. At the time of reporting, SKY traded near $0.06, up 1.5% over the previous day with daily volume around $30 million following a 31% spike, although it was down nearly 10% over the past week.
