Defi Savings Protocol Sky registered a loss of the first quarter of $ 5 million after interest payments to tokens holders doubled, according to a report created by Sky Financial Steakhouse Sky taxpayers.
The loss is a marked change of the previous quarter, when Sky, previously known as Makerdao, registered a $ 31 million gain. The ratio of the 102% increase in interest payments is the decision to encourage the use of the new Sky Dollar Stablecoin (USDS) of the existing DAI protocol.
“The savings rate of the sky remained very high at 12.5% in relation to the rest of the market, promoting mass tickets,” said Rune Christensen, Sky co -founder, Coindesk over Telegram. When Sky began to reduce interest rates to 4.5% in February, many investors stayed, he said.
The situation is a double -edged sword for the protocol, which was one of the first cohorts of decentralized finance applications in emerging in Ethereum in 2017.
Sky operates similar to a traditional bank. You need to lend others to a higher rate than you pay your savers.
However, offering higher rates in USD without a corresponding increase in the demand for the stable is damaging the profitability of the protocol, Paperimperium, the Blockchain Research and Development Company GFX Lab, COINDESK on Telegram governance link.
“USDS is a great drag in profits,” he said. “Dai earns money. USDS, not so much.”
The impulse towards USDS is part of the so -called Sky Final Plan, an initiative directed by Christensen aimed at transforming the protocol into a more decentralized and resistant system.
There is no new demand?
When Sky renamed Makerdao and launched USDS in August as part of Endgame, the plan was that the new Stablecoin would attract a different set of users than Dai.
USDS was designed to better comply with regulations and financial reports requirements. It was aimed at sophisticated investors such as coverage funds, family offices and other institutions that seek to submerge feet fingers in decentralized finances.
But it is not clear if USDS has been able to attract a substantial number of new users.
The returns that investors can earn in USDS to DAI are different: USDS pays 4.5%, while DAI produces 2.75%.
Many investors changed their DAI for USDS, which means that Sky had paid more to people who were previously happy to gain lower performance or, in many cases, without performance, Paperimperium said.
Undoubtedly, the report says that the combined supply of USD and DAI has increased 57% since the beginning of the quarter. But a large part of this increase is from Ethena, the synthetic dollar protocol. More than $ 450 million has accumulated in USD states, and the performance passes to those who support their own Stablecoin, USDE.
During the past week, Ethena has changed some of its USDTB USDS reserves, a Stablcoin backed by the Blackrock’s Institutional Digital Liquidity Fund, or Buidl.
The movement means that there is less USD in circulation. But it can also benefit Sky by reducing the amount of interest that the protocol must pay.
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