Galaxy Digital deepens ties with Sky Protocol stablecoin
DeFi & Yields ·
Galaxy Digital has put $100 million of its own balance sheet into Sky Protocol's yield-bearing token sUSDS and cleared it for use as collateral across its lending desk.
The move, confirmed by wublockchain.xyz, folds sUSDS into a trading operation that carries a $1.4 billion average loan book and works with more than 1,600 counterparties. By recognizing the token as eligible collateral, Galaxy gives institutional clients a way to pledge their sUSDS holdings against loans without giving up the underlying yield stream tied to the Sky Savings Rate.
That dual function is central to the arrangement: firms holding sUSDS can keep accruing returns on their entire position even after posting it as collateral, according to details reported by leviathan.news. This lets treasury holders treat the stablecoin as both a yield instrument and a liquidity tool inside Galaxy's institutional trading business rather than forcing a choice between the two.
Alongside the treasury purchase, Galaxy also acquired an undisclosed quantity of SKY tokens, signaling a stake in the protocol itself beyond simply holding its stablecoin. The two firms are also in talks to expand an existing $500 million warehouse facility, though the scope and terms of any enlargement have not been specified.
Sky's own ecosystem account flagged the arrangement as well, per x.com, pointing to at least two distinct outlets corroborating the tie-up. The combination of a sizable treasury allocation, a token purchase, and a facility expansion under discussion suggests a broader institutional relationship rather than a single transaction.
What remains unclear is the exact size of the SKY token purchase, which has not been disclosed, and whether the warehouse facility expansion will proceed or on what terms. Also unaddressed is how widely other institutional counterparties within Galaxy's 1,600-plus client base will adopt sUSDS as collateral now that it has been approved, and whether similar arrangements will follow with other yield-bearing stablecoins.