Skymoney savings rate: who sets sUSDS yield?
Sky Governance sets the Sky Savings Rate (SSR), the variable protocol rate accessed through sUSDS within Sky Protocol. Aggregate protocol surplus funds the rate. Holding USDS alone doesn’t accrue it.
updatedWho controls the rate and what funds it?
SKY token holders determine the SSR through onchain governance. They can change the rate, so an APY quote doesn’t fix what an sUSDS position will earn throughout a future holding period. The rate isn’t guaranteed.
Several protocol activities can contribute revenue to the surplus, including activity by independent Sky Agents. The SSR isn’t a direct pass-through of earnings from one lending market or investment strategy. Holding sUSDS gives access to the protocol rate without creating a claim on or exposure to a specific Agent, borrower, collateral pool, strategy, asset manager or revenue stream.
Which terms apply to sUSDS?
| Parameter | Value or mechanism | Scope and conditions |
|---|---|---|
| Rate authority | Sky Governance | The SSR is variable and can change through governance. |
| Funding | Aggregate Sky Protocol surplus | The rate doesn’t track the performance of one particular Agent or strategy. |
| USDS held alone | No SSR accrual | A wallet balance of USDS is distinct from an sUSDS savings position. |
| Accrual mechanism | USDS redemption value per sUSDS | Rate accrual changes the USDS represented by each token while the holder’s sUSDS token count stays unchanged. |
| Ethereum implementation | ERC-4626 sUSDS vault | The vault accepts USDS deposits and supports withdrawals or redemptions into USDS using its share-to-asset conversion. |
| Redemption timing | No fixed lockup period or maturity date | Redemption for USDS follows the applicable smart contracts. Network transaction costs can apply. |
| A single APY quote doesn’t reconstruct the rates applied over a holding period; accrued SSR is reflected in the position’s USDS redemption value. | ||
Skymoney savings rate - Who sets sUSDS yield?
- Which terms apply to sUSDS?
- Why can savings grow without more sUSDS tokens?
- How does the SSR relate to other yield options?
Why can savings grow without more sUSDS tokens?
sUSDS uses a value-accruing design. As the SSR accrues, each sUSDS can represent more USDS without adding tokens to the holder’s balance.
USDS targets a value near $1. sUSDS has a redemption value in USDS that reflects accumulated accrual, so one sUSDS shouldn’t be assumed to equal one USDS or one dollar. The token count and the amount redeemable are different measurements.
How does the SSR relate to other yield options?
stUSDS uses the SSR within a separate lending mechanism. Capital borrowed by SKY stakers accrues from the SKY Borrow Rate, while capital that isn’t being borrowed accrues the SSR. Its return depends on utilization. The stUSDS pool carries SKY collateral-price and potential bad-debt risk, and withdrawals depend on unused pool liquidity. Those conditions belong to stUSDS, which is structurally separate from sUSDS.
Fixed Yield uses an sUSDS market on Pendle v2. Its entry rate comes from market pricing and applies when the position is held to that market’s maturity date. Selling earlier means accepting the prevailing market price, which may be above or below the entry price; trade slippage can also apply. Pendle adds separate protocol risk. Sharing the SSR as an underlying yield source doesn’t give ordinary sUSDS a fixed rate or maturity date.
