Standard Chartered has initiated coverage of Sky’s SKY token with an end-2028 price target of 0.325 USD, implying roughly a fivefold gain from the 0.065 USD level cited in the bank’s report, and positioning the governance token of the decentralized finance protocol formerly known as MakerDAO as one of the more compelling risk-reward setups in the sector.
The call comes from Geoff Kendrick, the bank’s global head of digital assets research, who has built a reputation over the past two years as one of the most active traditional-finance voices covering crypto markets. Kendrick’s coverage of Sky argues the protocol occupies a unique position in DeFi that traditional finance investors can readily understand.
A federal bank on the blockchain
Kendrick likens Sky to a “federal bank” because it performs the three core functions of a central banking institution in decentralized form: it issues stablecoins, it creates and maintains a governance framework, and it charges borrowers a wholesale interest rate through its lending markets.
That framing matters for valuation. Unlike most governance tokens, whose value accrual stories remain speculative, Sky’s cash flows are concrete. The protocol generates substantial revenue from the interest paid on loans collateralized by assets deposited into its vaults, and it distributes value back to SKY holders primarily through staking rewards, with token buybacks accounting for a smaller share of returns.
The staking-centric model gives SKY a bond-like quality that Kendrick argues should appeal to institutional allocators as the tokenization of financial assets accelerates. Sky’s sky-native stablecoin suite, anchored by USDS and its yield-bearing sibling sUSDS, ranks the protocol as the third-largest stablecoin issuer in the world, behind only Tether and Circle, and the single largest issuer of yield-bearing stablecoins.
The numbers behind the call
According to DeFiLlama data cited in the report, Sky’s sUSDS token holds 4.5 billion USD in total value locked and offers savers a 3.6 percent annual percentage yield, generated organically from the protocol’s lending revenue rather than from token emissions. That real yield stands out in a stablecoin market where most products either pay nothing or rely on subsidized incentives.
The 0.325 USD target implies SKY will broadly keep pace with Ether and outperform Bitcoin through 2028, a forecast consistent with Standard Chartered’s broader digital asset outlook. The bank projects Ether reaching 18,000 USD and Bitcoin reaching 300,000 USD by the end of 2028. Kendrick also initiated coverage of Arbitrum earlier this week with a 10 USD target for 2030, framing layer-2 scaling and stablecoin infrastructure as the two highest-conviction themes of the current cycle.
From MakerDAO to Sky
The report represents a milestone for a protocol that has spent two years executing one of the most consequential rebrands in DeFi history. MakerDAO, created by Rune Christensen in 2017 as the first major collateralized debt position platform and the issuer of the DAI stablecoin, began its transformation into Sky in 2024, migrating DAI holdings to USDS, converting the MKR governance token into SKY at a 1:24,000 ratio, and launching the Sky Money interface designed to make decentralized savings accessible to mainstream users.
The migration was contentious. Some long-time community members argued the rebrand discarded one of the most recognized names in the industry and created confusion around the dual-token system during the transition. Others countered that the fresh identity and improved user experience were necessary to compete with Tether and Circle for the next wave of stablecoin adoption, particularly as institutional interest in yield-bearing dollar instruments grows.
Risks to the outlook
Standard Chartered’s bullish case is not without hazards. The stablecoin market is increasingly crowded, with Tether’s dominance in offshore markets, Circle’s regulatory-first positioning in the United States, and a wave of bank-issued alternatives backed by newly enacted stablecoin legislation all competing for the same deposits. Any erosion of Sky’s yield advantage or a security incident in its vaults could trigger rapid outflows.
Regulatory treatment of the SKY token itself remains unresolved. If regulators classify governance tokens with staking rewards as securities in key jurisdictions, the protocol’s distribution model could face constraints. Kendrick’s model also assumes the broader DeFi and tokenization thesis plays out on schedule, an assumption that has been repeatedly tested by legislative delays such as this week’s stalled CLARITY Act vote in the United States Senate.
Still, with 4.5 billion USD in value locked in sUSDS alone, a proven revenue engine, and now sell-side coverage from a major global bank, Sky enters the next phase of the cycle with institutional legitimacy that few DeFi protocols can match. At 0.065 USD against a 0.325 USD target, the market is pricing in significant doubt. Kendrick’s initiation is effectively a wager that the federal bank of DeFi keeps compounding while the sector’s skeptics keep waiting for it to break.
Kendrick calling Sky a federal bank on chain is the clearest pitch for SKY I have read from a bank. 0.325 by 2028 sounds wild until you remember the staking rewards are actual revenue, not vibes.
0.325 by 2028 also assumes USDS keeps that top 3 spot while Tether and Circle push back hard. revenue is real, competition is not priced in
competition is exactly it. USDS holding third while tether and circle fight back is the whole bear case in one line, stanchart barely touches it
USDS holding third is the assumption doing all the work in the model. one distribution deal flip and the revenue line wobbles
one flip and the model wobbles, exactly. usdc nearly broke in the svb weekend of 2023, third place in stablecoins is not a moat
exactly, one usdc style wobble on USDS and the whole 0.325 model needs a rerun. third place is a snapshot, not a permanent seat
Kendrick initiating on SKY with a 0.325 target for 2028. fivefold from 0.065, and honestly the USDS fee revenue argument is the strongest part of the call
two years of holding a governance token is a big ask, but third largest stablecoin issuer behind tether and circle is hard to argue with
Fivefold from 0.065 assumes nothing goes wrong with the MakerDAO to Sky migration in between. Two years is a long time in DeFi governance.
the migration already shipped though, USDS has been live for ages. real risk is governance votes diluting stakers, not the tech swap
Fair point on governance risk, but buybacks even being a smaller share of returns puts SKY ahead of most governance tokens that pay holders nothing at all.
the migration shipped months ago tho, seoulvault covered that above. what actually dilutes holders is the DAO voting to redirect fees, and that risk is alive every single week
im still calling it maker tbh, the rebrand cost more goodwill than any bank model prices in
my tracker still shows MKR too lol. kendrick modeled the vault fees, not the name. rebrand regret is emotional, the revenue line is the actual signal
rebrand goodwill is real but so is the fee history. a 5x target off 0.065 while the DAO still argues about buybacks weekly tells you the model and the governance live on different planets
same, my brain still autocompletes sky to maker. at least kendrick actually modeled the vault fees instead of vibes, that part holds up
A tradfi research desk finally modeling vault interest as protocol revenue instead of hand waving about token utility. Kendrick has been early on BTC before, watching this one.
The federal bank on a blockchain framing is exactly how you sell DeFi to tradfi allocators. Smart note from Standard Chartered.
Kendrick values the fee revenue well, but every buyback projection assumes the DAO votes to keep sending cash to SKY holders instead of redirecting it. That is a weekly governance vote, not a given.
Held MKR since 2019. The protocol has printed real fees the whole time. A bank noticing now is confirmation, not news.
held since 2019 too. the fees are real but the protocol and the token are different stories, SKY underperformed the revenue line every single year
does the 0.325 target account for sky supply growth from the migration? feels like dilution is the quiet variable nobody models
good question, the report handwaves the supply growth from migration. token emissions alone eat a quiet chunk of that 5x
two years of weekly dao votes between here and 0.325. one redirected fee stream and the whole stanchart model needs a rewrite, that risk never leaves
0.325 by end 2028 assumes the buyback votes keep passing and rates cooperate. thats two political processes stacked on a spreadsheet, not a model