S&P Global Drops Bombshell: DeFi’s Sky Protocol Slammed With First-Ever B- Rating

DeFi just got a reality check from the big leagues.

S&P Global—the gatekeeper of traditional finance credibility—just handed Sky Protocol a historic B- rating. Not quite junk status, but close enough to smell the landfill.

Why it matters: When legacy institutions start grading decentralized projects, the irony writes itself. Sky Protocol now wears the scarlet letter of institutional scrutiny—a badge of honor or a warning sign? Depends which side of the crypto trenches you're in.

The fine print: No sugarcoating from S&P's analysts. Sky's 'innovative' mechanics got flagged for risks that'd make a CeFi compliance officer faint. But let's be real—since when has DeFi cared about risk models?

Bottom line: One small step for institutional adoption, one giant leap for centralized validation. The revolution will be rated—apparently.

DeFi-Specific Challenges

Sky’s Asset-Liability Committee participated in the rating process, addressing both traditional financial risks and DeFi-specific vulnerabilities including smart contract risks and governance mechanisms.

S&P’s assessment resulted in an anchor rating of “bb” for Sky, below the “bbb+” anchor rating typically assigned to U.S. banks, reflecting the additional risks associated with decentralized protocols.

As S&P’s ratings for stablecoins, USDC is rated 2 (strong), and Tether and USDS are rated 4 (constrained). The rating of Protocol underscores the potential benefits and challenges of decentralized finance (DeFi), paving the way for further integration with traditional finance.

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