S&P's first rating of the DeFi protocol Sky Protocol! However, the rating result is B- and the stablecoin USDS faces high pressure for stability.

The cryptocurrency circle (120BTC.COm) news: S&P Global ( S&P Global ) On August 7, in its latest report, for the first time included the decentralized finance ( DeFi ) protocol Sky Protocol in its credit rating scope, but the rating result is "B-".

The report points out that while Sky Protocol can still fulfill its financial obligations, it has limited room for pressure when market or economic conditions deteriorate. Nevertheless, this rating reflects a systematic examination of DeFi risks under the traditional financial framework and signals that the cryptocurrency market is moving towards a more rigorous compliance era.

S&P Commentary Focus: Centralized Governance and Weak Capital

S&P Global pointed out that the biggest concern with Sky Protocol is the concentration of governance. Founder Rune Christensen holds about 9% of the governance tokens, and the community's participation rate in voting for Sky Protocol is relatively low, resulting in a substantial concentration of decision-making power in the hands of Rune Christensen, making it difficult to achieve the true goal of decentralization; in fact, there is still a long way to go. The report stated: "The degree of decentralization of the Sky Protocol is limited, and the concentration of governance is high. If key individuals change their attitudes or encounter unforeseen circumstances, the protocol will face significant uncertainties."

At the same time, in terms of capital, the protocol's risk-adjusted capital ratio (Risk-Adjusted Capital Ratio) was only 0.4% as of July 27, far below the common threshold of over 5% seen in traditional banks, leaving very limited room for projects to buffer in case of emergencies.

Liquidity Testing: The Challenge of Single Large Holders and Stablecoin Pegging

The second major focus of the report is on liquidity. The main stablecoin of Sky Protocol, USDS( Sky Dollar), has a market value of approximately 7.7 billion USD, ranking third. S&P rated the liquidity mechanism of USDS with a score of 4 out of 5, indicating higher stabilization pressure. The key reason is that Sky Protocol does not commit to redeeming USDS for USD, but only allows minting with digital assets. If the market experiences severe fluctuations, it may trigger a de-pegging issue.

At the same time, with large single depositors like Ethena having deposited around $1.5 billion, if the depositors are eager to withdraw their funds, a run on the bank risk may also occur.

Regulatory Grey Area and Technical Risk Synchronization Pressure

Thirdly, S&P also included regulation and technology in its rating model for Sky Protocol. S&P Global believes that DeFi protocols and DAOs still occupy a gray area in legal positioning, and the latest stablecoin bill in the United States favors regulated centralized issuers, with no clear regulations for DeFi yet. Sky Protocol allocates about 35% of its assets to US Treasuries and USDC, although it aims to strengthen its stable image, it has also thus connected more closely with traditional finance. If regulation tightens in the future, the project may face pressures from licensing, personnel, and compliance costs.

From a technical perspective, S&P Global believes that vulnerabilities in smart contracts and the risks of oracle manipulation are indeed difficult to avoid. Although Sky Protocol has completed multiple rounds of audits and launched a bug bounty program, S&P still categorizes this risk as a "structural" risk. The report points out that future hacking techniques will continuously evolve, and the project's firewall needs to be consistently upgraded.

Rating Outlook: Breaking Concentration and Enhancing Capital for Upgrade Potential

S&P Global has assigned a "stable" short-term outlook to Sky Protocol, indicating that there is a low probability of a significant adjustment to this rating in the coming year. To improve the rating, the report states that the governance power of Sky Protocol needs to be further decentralized, community voting participation must be increased, the risk-adjusted capital ratio of Sky Protocol should consistently remain above 5% in the long term, the concentration of depositors needs to significantly decrease, and Sky Protocol must establish a more resilient liquidity backing. Conversely, if governance concentration increases or asset quality deteriorates, the rating may even be downgraded again.

In summary, the involvement of traditional rating agencies signifies that the DeFi ecosystem is moving towards standardization. In the future, if other projects want to achieve higher scores, transparency and risk management processes will become necessary conditions, which will also compel developers to continue striving towards the goal of "decentralization" and to maintain the robust operation of their projects.