Sky, formerly known as Maker, has officially launched its USDS stablecoin on the Solana blockchain, marking a significant step in its strategy to increase Solana’s decentralized finance (DeFi) liquidity and total value locked (TVL). The move introduces Solana’s first major DeFi-native stablecoin, aimed at enhancing lending, borrowing, and trading within the network’s leading DeFi platforms.
In a November 19 announcement, Sky revealed that USDS will play a crucial role in expanding Solana’s DeFi ecosystem, which has seen impressive growth in both daily trading volumes and TVL throughout 2024. As of the announcement, Solana’s TVL had surged from $1.4 billion on January 1 to over $8.3 billion, while its daily trading volume recently reached an all-time high of $7.14 billion, according to data from DefiLlama.
Solana and Sky’s Vision for DeFi Integration
Sky sees its vision aligning with Solana’s high-performance ecosystem, which is known for its consumer applications, composability, and scalability. The introduction of USDS to Solana is supported by Wormhole’s Native Token Transfer technology, allowing the stablecoin to be natively multichain across both Solana and Ethereum. This eliminates the need for wrapped tokens, ensuring a unified supply of USDS across networks. Additionally, Sky is utilizing Wormhole to bridge its governance token, SKY, to Solana.
Incentives for Early Adoption and Liquidity Providers
To encourage early adoption, Sky is offering rewards for users and liquidity providers across four DeFi protocols on Solana. Kamino Finance users, for example, will receive 200,000 USDS weekly for liquidity provision to USDC/USDS pairs, while an additional 100,000 USDS will be allocated for stablecoin suppliers. Drift Protocol users supplying USDS will be eligible for 100,000 USDS in weekly rewards, and Save Finance participants can earn a share of 400,000 USDS monthly for contributing to stablecoin liquidity.
Expansion Plans and Governance Considerations
Sky also plans to roll out SkyLink, a cross-chain bridge that will enable interoperability between USDS and sUSDS, a savings-focused version of the stablecoin. This feature, which is subject to governance approval, aims to further expand the stablecoin’s cross-chain functionality, benefiting users who hold USDS across multiple platforms.
A Growing Player in the Stablecoin Market
Launched in September 2024, USDS is a rebrand of the Dai stablecoin and is now the third-largest stablecoin by market capitalization, valued at $5.23 billion. It competes with dominant stablecoins like Tether’s USDT and Circle’s USDC, which together represent over 90% of the stablecoin market, valued at $184.7 billion according to DefiLlama.
Sky’s expansion into Solana further solidifies its position in the competitive stablecoin market, offering new opportunities for users and liquidity providers within the rapidly growing DeFi space.
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