Sky Protocol, formerly Maker, continues to expand its USDS offerings, reflecting growing demand for passive yield. The protocol retains part of the existing DAI offering, which is also actively used in decentralized transactions and lending.
Sky Protocol’s stablecoin, USDS, reached a new supply peak above 1.8 billion, following accelerated swaps from DAI. Both the new and old stablecoins have a total supply of over 5.8 billion and are used in active and passive DeFi activities. USDS is still mining as DAI’s swap mechanism is still open.
The main driving force behind USDS’s growing supply is the 12.5% annual yield for the token. A total of 2.1 million USDS and DAI have been blocked from staking in exchange for the proceeds.
The new delivery milestone came after USDS surpassed 1.5 billion tokens on January 3. The token expanded in the early days of the new year, reaching peak supply with rapid growth on Ethereum and smaller additions on Solana.
The total supply of USDS exceeds 1.8 billion and reaches a new record. https://t.co/JW2MR3JzbG pic.twitter.com/GpWaUNIsvo
— Sky (@SkyEcosystem) January 10, 2025
The asset is in the early stages of spreading to other networks. To date, approximately 1.53 billion of the tokens are on Ethereum.
The Solana version, with over 102,000 tokens, is a test for the later phase of Sky Protocol’s full launch. The main goal is to offer the same DeFi services and returns, but on Solana’s highly scalable network.
USDS also prepared for its expansion on Base, offering outsized returns to the first liquidity providers on Aerodrome. In the coming weeks, USDS will continue its inflows into Base, which already owns more than $3.5 billion worth of other stablecoins.
Sky Protocol and Maker’s legacy vaults are still among the best DeFi apps for passive income. Some partnerships are achieved through the largest subDAO, Spark Protocol, which has launched its own set of Aave vaults. Over time, Sky Protocol will aim to regain Maker’s former position as one of the largest stablecoin issuers and passive income providers.
USDS changes trading profile with representation on Solana
The growth of USDS is also accompanied by increased activity and revenue on Solana. The shift came in November, when Sky strategically moved to the new chain and displaced volumes on Ethereum.
The highly active USDS on Solana indicates a trend to adopt some of the older protocols on Ethereum. Recent months have seen Solana activity rise, with potential demand for passive returns to lock in profits.
USDS’s offering expanded again in early 2025, preparing for greater influence over Solana and Base. | Source: Dune Analytics
The total value locked on Solana increased to $8.54 billionwhich has grown faster in the past three months. The TVL rose not only due to the higher nominal price of SOL, but also due to the inflow of tokens and stablecoins.
The stablecoins on Solana have already reached $5.79 billion, with USDC usage dominating. The USDS market share has increased to approx 1% of the entire offering, and is still ahead of other niche stablecoins.
At this early stage, USDS usage on Solana is more limited. On Ethereum, USDS transactions reach over $30,000, while the Solana version has an average value transactions of approximately $3,000, as the asset is still in use.
The USDS on Solana is still spread across a handful of whale portfolios. One of the leading ones addresses owns 1.5 million USDS and is one of the largest return recipients. The top 4 addresses on Solana own more than 50% of the USDS supply as retail portfolios continue to overtake the whales. USDS expansion started from November 19, with a rapid spike in activity.
USDS also trades on Raydium and Aerodrome, albeit with a caveat as it is a coinable and freezeable asset. This means that some holders may need to consider the option of locked tokens if they do not meet the terms of the Sky Protocol.
The Raydium USDS/USDC pair has over $69 million in liquidity, while Aerodrome has the same $1.2 million. The token is primarily for staking and passive yield and is not part of the meme token ecosystem.
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