Sky Protocol receives Moody's first stablecoin protocol rating, manages about $10 billion in assets but only $90 million in equity

Odaily News: Decentralized finance (DeFi) protocol Sky Protocol has been granted a B3 long-term counterparty risk rating by credit rating agency Moody's, with a stable outlook; this is the first time Moody's has rated a stablecoin protocol.

As of September, Sky Protocol held approximately $90 million in tangible common equity, corresponding to about $10 billion in tangible managed assets. Moody's described its capital position as a "significant credit weakness." Sky Protocol, formerly known as MakerDAO, is responsible for managing the dollar-pegged USDS and DAI.

Moody's noted that approximately 45% to 50% of Sky Protocol's assets consist of stablecoins and tokenized money market funds, with another approximately 25% in crypto-collateralized loans. Its rating is also constrained by low capital adequacy, confidence-sensitive stablecoin liabilities, and risks related to its DAO structure.

If the capital ratio rises to and remains above 2.5%, and profitability, liquidity, and asset risk remain stable, Sky Protocol's rating may be upgraded; if the capital ratio falls below 0.5%, it reports consecutive quarterly losses, or liquidity weakens, the rating may be downgraded. (Bitcoin.com News)