Sky's TVL dropped from $5.20 billion on October 31, representing a decrease of roughly $778 million. Over the same period, USDS circulating supply fell from $6.45 billion to $5.59 billion, a contraction of approximately 13.4%.
The simultaneous declines indicate that the reduction was not limited to changes in the market value of collateral. However, the figures alone do not establish how much of the TVL decrease resulted from redemptions or withdrawals.
Sky TVL Reaches Its Lowest Level in the Latest 30-Day Period
The November 7 TVL figure was the lowest among 30 daily observations beginning October 9. It was approximately 29% below the period's peak of $6.23 billion recorded on October 12.
The reading also fell below the $5.81 billion median across the preceding 29 daily snapshots, based on The Defiant's comparison of the DefiLlama series. DefiLlama's default TVL metric excludes staking.
USDS and DAI Supplies Both Decline
Sky, formerly known as MakerDAO, operates the USDS and DAI stablecoins. According to Sky Frontier Foundation documentation, users can convert between the two tokens at a one-to-one ratio.
Despite the contraction in USDS supply, DAI did not record an increase over the same period. DefiLlama data shows DAI circulating supply declining from $4.72 billion on October 31 to $4.67 billion on November 7.
The distinction between TVL and stablecoin supply is important when interpreting the figures. DefiLlama's Sky Lending methodology values collateral tokens at market prices and includes USDC held in the Peg Stability Module, which supports stablecoin conversions.
As a result, TVL can decline because collateral prices fall or token balances decrease. The metric does not independently measure net withdrawals or the amount of unused lending capacity in the protocol.
Sky Savings Rate Remains Separate From TVL Changes
The decline in Sky's tracked asset base does not automatically mean that savers will receive lower returns. Sky.money lists an annual percentage yield of 3.80% for sUSDS, the token users receive when depositing USDS into the protocol's savings module.
The Sky Savings Rate is determined through governance and funded by the protocol's aggregate surplus. It does not automatically change in response to borrowing demand.
Sky's documentation explains that protocol revenue comes from fees generated by collateralized loans and returns from capital deployed through independent allocators. The savings rate is paid from this revenue, and any change to the rate requires an onchain governance vote.
source: thedefiant
Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
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Hokanews isn’t responsible for any losses, gains, or chaos that might happen if you act on what you read here. Investment decisions should come from your own research—and, ideally, guidance from a qualified financial advisor. Remember: crypto and tech move fast, info changes in a blink, and while we aim for accuracy, we can’t promise it’s 100% complete or up-to-date.
