Sky Protocol Wins Moody's First-Ever Stablecoin Protocol Rating; Manages $10B in Assets, $900M in Equity

Moody's has issued a B3 long-term counterparty risk rating with a stable outlook for DeFi platform Sky Protocol, in what the agency described as its first rating of a stablecoin protocol, according to Odaily Planet Daily. Moody's said that as of September, Sky Protocol held about $900 million in tangible common equity and managed roughly $10 billion in tangible assets. Despite the scale, the agency labeled the protocol's capital position a "material credit weakness." Sky Protocol, formerly MakerDAO, oversees the dollar-pegged stablecoins USDS and DAI. Moody's estimated that 45% to 50% of its assets are in stablecoins and tokenized money market funds, with another roughly 25% tied to crypto-backed loans. The rating is capped by low capital adequacy, exposure on the liability side to confidence-sensitive stablecoins, and governance and operational risks linked to its DAO structure. Moody's indicated the rating could be upgraded if the capital ratio rises above 2.5% and stays there, while profitability, liquidity and asset risk remain steady. A downgrade could follow if the capital ratio drops below 0.5%, the protocol posts back-to-back quarterly losses, or liquidity deteriorates. (Bitcoin.com News)