Galaxy Digital has allocated $100 million of its own balance sheet to Sky Protocol’s yield-bearing stablecoin sUSDS and approved the asset as collateral for institutional lending, according to The Block. Clients can pledge sUSDS while continuing to earn the variable Sky Savings Rate, which was about 3.60% at the time of writing, with roughly $4.37 billion deposited in the savings product.
The purchase represents about 7% of Galaxy’s average Q2 loan book of $1.438 billion. Galaxy reported 1,741 trading counterparties at the end of Q2, up from 1,691 in Q1. Max Bareiss, Galaxy’s head of lending, said the company funded the sUSDS purchase directly from its balance sheet; as of June 30, Galaxy held about $2.5 billion in cash and stablecoins.
The move deepens an existing credit relationship with Sky’s ecosystem. In July, Grove established a $500 million warehouse lending facility supplying USDS capital for senior secured institutional loans originated and serviced by Galaxy, backed by BTC and ETH with overcollateralization, continuous loan-to-value monitoring and two-year maturity caps. The two firms are discussing an expansion of that facility.
Galaxy separately acquired an undisclosed amount of SKY, the Sky ecosystem’s governance token. Greg Feibus, Head of Global Capital Markets at Sky Frontier Foundation, said holding SKY reflects the breadth of integration across treasury and lending, with Galaxy viewing Sky’s ability to generate meaningful protocol revenue and increasing institutional adoption as central to its investment thesis.
Sky reported that sUSDS holders had accumulated more than $250 million in yield since inception by June, while preliminary Q2 figures showed $107.35 million of gross protocol revenue and $29.87 million of net protocol surplus flowing to reserves. Galaxy has not disclosed collateral haircuts, loan-to-value thresholds or liquidation terms for sUSDS.
