Exploring the Sky Ecosystem: Sky’s Financial Performance
An Overview of the Sky Ecosystem and the Sky Risk & Analytics Dashboard
Welcome back to another edition of our series: “Exploring the Sky Ecosystem”. The series has two primary objectives: provide an overview of the Sky Protocol and the broader Sky Ecosystem while explaining how to navigate the Sky Risk & Analytics Dashboard.
This post provides an overview of Sky’s financial performance, along with a step-by-step guide on how you can review it yourself.
Introduction
Sky’s financial performance is summarized in the “Revenue” page of the Sky Risk & Analytics Dashboard.
→ https://info.sky.money/revenue
The Sky Ecosystem’s estimated annual net revenue currently stands at $121.64 million. There are a number of activities that need to be considered to derive the bottom line:
Stability Fees (Revenue): $300.51M (estimated annual revenue)
Liquidation Fees (Revenue): $3.9M (last 12 months annualized)
PSM Fees (Revenue): $47.01K (last 12 months annualized)
Savings Rate (Expense): $122.16M (estimated annual cost)
Workforce (Expense): $60.66M (last 12 months annualized)
Below, we cover each category in further detail.
Stability Fees (Revenue)
The Stability Fee revenue category includes all income generated from Sky’s lending activities. Since April 2023, Sky’s Stability Fee revenue has shown a steady upward trend. This gradual increase has been driven by sustained Core Vault engagement and the introduction of new products, including Cash RWA, SparkLend, the LitePSM, and the Spark DAI Vault on Morpho.
At the time of writing, Sky’s estimated annual revenue from the 5 collateral categories are:
Cash RWA: $75.16M
Spark: $101.27M
Stablecoins: $45.69M
Core: $74.16M
Legacy RWA: $4.23M
Refer to the Collateral page of the Sky Risk & Analytics Dashboard to review these figures in further detail.
→ https://info.sky.money/collateral
Liquidation Fees (Revenue)
Liquidation fee revenue is intentionally lower and less consistent than Stability Fee revenue. The primary role of liquidation penalties is to incentivize vault owners to proactively manage their positions, and effectively prevent unnecessary liquidation events.
→ https://info.sky.money/liquidations
PSM Fees (Revenue)
Sky typically maintains a 0% PSM fee structure. The only recent instance of positive PSM fees occurred during the LitePSM migration plan, where fees on PSM-USDC-A were temporarily increased to incentivize migrations to LITE-PSM-USDC-A. Consequently, PSM fee revenue (last 12 months annualized) has totaled $47.01K.
Savings Rate (Expense)
At the time of writing, the Dai Savings Rate is 5.5% and the USDS Savings Rate is 6.5%. The Savings utilization amounts to 38.02% of total DAI+USDS supply (1.62 billion DAI earning 5.5% and 504 million USDS earning 6.5%).
To sustain the Savings feature at these rates, Sky’s estimated annual cost is approximately $122.16M.
→ https://info.sky.money/savings
Workforce (Expense)
The Workforce category tracks allocations to contributors within the Sky Ecosystem. Year-to-date, workforce expenses have reached $53.3 million, with the annualized total for the past 12 months amounting to $60.66 million.
Token Supply Changes
The Sky Risk & Analytics Dashboard does not incorporate token supply changes in its revenue and expense calculations. However, Block Analitica is developing a dedicated token page to track all relevant token activities, including both deflationary mechanisms like the Smart Burn Engine, and inflationary mechanisms, such as Sky Rewards and token vesting.