Hassan Maishera
TL;DR
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Galaxy Digital has added $100 million of Sky Protocol’s sUSDS to its corporate treasury.
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The company will allow institutional clients to use sUSDS as collateral for loans while continuing to earn the Sky Savings Rate.
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Galaxy also purchased an undisclosed amount of SKY tokens as part of its broader relationship with the protocol.
Galaxy Digital has purchased $100 million of Sky Protocol’s yield-bearing sUSDS stablecoin for its corporate treasury and approved the asset as collateral across its institutional trading business.
Galaxy funded the acquisition from its own balance sheet, Head of Lending Max Bareiss said. The digital-asset company held nearly $2.5 billion in cash and stablecoins as of June 30 and said it is among the first publicly traded companies to hold sUSDS.
The integration expands an existing relationship between Galaxy and the Sky ecosystem that includes institutional lending, tokenized credit and onchain borrowing products.
Galaxy Adds sUSDS to Its Corporate Balance Sheet
sUSDS is a yield-generating version of Sky Protocol’s dollar-pegged USDS stablecoin. Holders receive the variable Sky Savings Rate, which accrues to the asset over time.
By placing $100 million in sUSDS on its balance sheet, Galaxy can earn the protocol’s savings rate while maintaining exposure to a dollar-denominated crypto asset.
The allocation remains subject to the risks associated with stablecoins and decentralized finance, including fluctuations in the savings rate, smart-contract vulnerabilities, collateral performance and the ability of the underlying system to maintain its dollar peg.
Galaxy has also acquired an undisclosed quantity of SKY, the governance and ecosystem token associated with Sky Protocol.
Sky Frontier Foundation Global Head of Capital Markets Greg Feibus said the SKY position reflects the breadth of the relationship across Galaxy’s treasury and lending operations.
According to Feibus, Galaxy’s investment thesis includes Sky’s ability to generate protocol revenue across different market conditions and the increasing institutional use of the broader ecosystem.
Institutional Clients Can Use sUSDS as Loan Collateral
Galaxy has approved sUSDS as collateral across its institutional trading platform, which serves more than 1,600 counterparties.
Clients can now pledge the stablecoin against loans while continuing to receive the Sky Savings Rate on their entire sUSDS position for the duration of the financing arrangement.
That structure allows an institution to obtain liquidity without selling the asset or giving up its yield. Galaxy’s institutional trading operation maintains an average loan book of approximately $1.4 billion, giving the integration potential to expose sUSDS to a broad group of professional market participants.
Feibus compared the arrangement with a common practice in traditional finance, where institutions pledge assets such as US Treasury securities to secure loans. As more financial activity moves onchain, he argued, using a yield-bearing dollar asset as collateral is a natural extension of that model.
The arrangement could improve capital efficiency because the pledged position continues generating returns while supporting a separate borrowing transaction. Its overall economic value will depend on the savings rate, Galaxy’s loan terms and the risks attached to the collateral.
Sky said institutional interest in its ecosystem has increased since S&P Global assigned the protocol a B- credit rating last year.
The rating gives professional investors an additional external assessment of the protocol, although B- remains below investment grade and indicates substantial credit risk.
Feibus said institutions can examine how Sky generates surplus revenue and independently verify the protocol’s collateral and balance-sheet information onchain. That transparency may help underwriting teams assess the system without relying entirely on disclosures from an issuer.
Onchain verification does not remove risk, but it can give market participants more frequent access to information about collateral positions and protocol activity.
Demand for sUSDS has grown considerably. Its supply reached $5.52 billion at the end of the second quarter, representing an increase of 149% from the same period a year earlier.
The growth suggests expanding use of the token as a savings product and source of dollar-denominated collateral within decentralized finance. Galaxy’s adoption could help extend that use further into institutional lending.
Galaxy and Sky Expand Existing Lending Relationship
The $100 million treasury purchase builds upon several financing arrangements already connecting Galaxy with the Sky ecosystem.
Grove, a Prime Agent within Sky, provides Galaxy with a $500 million warehouse facility supporting institutional loans secured by digital assets.
A warehouse facility supplies capital that a lender can use to originate or finance loans before they are repaid, refinanced, or packaged into another product.
In January, Grove also contributed $50 million to anchor Galaxy’s $75 million tokenized collateralized loan obligation on Avalanche.
A CLO pools loans and distributes their cash flows through structured investment products. Tokenizing the vehicle allows ownership and settlement records to operate through blockchain infrastructure.
Galaxy has separately borrowed through Spark, a Sky capital allocator, to support the Galaxy Onchain Financing Rate, or GOFR.
Launched in July, GOFR combines borrowing rates from several onchain lending protocols—including Aave, Morpho, Spark and Kamino—to produce a blended financing rate for crypto markets.
Deal Connects Corporate Treasury and Onchain Credit
The expanded partnership brings together three major areas of institutional crypto finance: corporate treasury management, collateralized lending and tokenized credit.
Galaxy can use sUSDS as a treasury asset; its clients can pledge the token for loans, and Sky-affiliated entities can provide capital to Galaxy’s lending operations.
The relationship also illustrates how decentralized-finance assets are being adapted to workflows familiar to traditional institutions. Instead of holding a non-yielding stablecoin or selling an asset to raise cash, a firm can potentially pledge a yield-bearing token and retain its income stream.
