Galaxy Allocates $100M to Sky Protocol's sUSDS in Major DeFi Move
Galaxy has made a significant move in the world of on-chain finance by allocating $100 million of Sky Protocol's sUSDS to its corporate treasury. The firm has also approved sUSDS as collateral for institutional clients taking loans through its trading business, which carries an average loan book of approximately $1.4 billion.
This is more than just a token purchase, as it marks the first time that sUSDS has been used as eligible collateral in an institutional setting. Clients pledging sUSDS can continue earning the Sky Savings Rate while the asset backs their borrowing, a model that is reminiscent of traditional markets where treasury securities can earn yield while serving as collateral.
Galaxy and Sky have a pre-existing relationship, with Grove providing Galaxy with a $500 million warehouse facility used to finance institutional loans backed by digital assets. The addition of sUSDS to the treasury and collateral framework ties these pieces together and marks a significant step towards the adoption of DeFi in traditional markets.