Standard Chartered compared DeFi project Sky to a "federal bank": why the bank expects SKY token to rise 5x

Standard Chartered has initiated analyst coverage of DeFi project Sky for the first time and set a target price of $0.325 by the end of 2028 for its SKY token. This is roughly five times higher than the $0.065 level the bank used in its September 11 report.

The analysts' main argument is related not so much to the token itself as to the rapidly growing stablecoin market. Standard Chartered expects that by the end of 2028 their total market cap could reach $2 trillion, and Sky aims to capture a significant portion of the digital dollar segment that allows earning yield.

Standard Chartered's Head of Digital Assets Research, Geoff Kendrick, even compared Sky's model to a "federal bank". This is not a legal status, but an analogy: the protocol issues stablecoins, sets the rules for system governance, and provides capital to other ecosystem participants at rates it determines.

What is Sky and what does MakerDAO have to do with it

Sky is the new name of one of the oldest and largest decentralized finance projects, MakerDAO. The rebranding began in 2024.

Along with it, the names of the main ecosystem assets also changed. The SKY token became the successor to MKR, and USDS is the updated version of the DAI stablecoin.

USDS is pegged to the dollar and is used as the primary capital within the system. SKY holders, in turn, participate in protocol governance: voting on rates, risk parameters, and other changes.

Why Standard Chartered compared Sky to a bank

The comparison becomes clearer when looking at the flow of money within the system.

Sky issues USDS, after which independent participants in its ecosystem—so-called agents—receive this capital and deploy it in various financial strategies.

According to data cited by Standard Chartered, three major agents—Spark, Grove, and Obex—have already attracted about $5.9 billion in USDS.

The limits set for them are significantly higher—totaling about $17.5 billion. Therefore, the bank's analysts see room for further expansion of lending even without new agents appearing.

It is here that the banking analogy arises: Sky creates a digital monetary unit, sets the rules of the system, and provides large amounts of liquidity to participants who then deploy the capital and earn on the spread between rates.

But unlike a traditional bank, Sky operates through blockchain and smart contracts, and key parameters are determined by token holder voting. The project is not a bank and does not have a federal banking license.

Sky has bet on yield-bearing stablecoin

One of the main reasons for Standard Chartered's interest is the scale of sUSDS.

Regular USDS itself does not generate yield. However, it can be converted into sUSDS, which receives a variable yield through the Sky Savings Rate mechanism.

As of September 11, there were about 4.66 billion sUSDS in circulation, and the current rate was about 3.6% APR. It is not fixed and can change at the discretion of Sky's governance system.

The project itself calls sUSDS the world's largest yield-bearing stablecoin. Standard Chartered also considers Sky the largest player specifically in this part of the market.

Why yield is becoming important

Most major stablecoins work differently.

USDT or USDC allow storing and transferring digital dollars, but the yield from assets held in their reserves is typically not distributed directly to ordinary token holders.

Yield-bearing products offer a different model: the user maintains dollar exposure but simultaneously receives variable income.

Standard Chartered believes that this difference could become especially important as stablecoins move beyond crypto trading and begin to be used for payments, corporate treasury management, and operations with tokenized assets.

Stablecoin market could grow to $2 trillion

The SKY forecast is part of Standard Chartered's much broader bet on digital money.

The bank expects the global stablecoin market capitalization to reach approximately $2 trillion by the end of 2028.

Already in its May investor presentation, Standard Chartered estimated the current market at about $323.5 billion and expected multiple expansion over the next few years.

At the same time, the bank forecasts another ~$2 trillion in tokenized real-world assets—from government bonds to investment funds.

If more of these assets move onto the blockchain, DeFi platforms could serve as infrastructure for lending, collateralizing transactions, and managing liquidity.

How Sky's growth could be reflected in SKY

The SKY token itself is not a stablecoin and is not pegged to the dollar. Its value depends on the market.

Standard Chartered's logic is that as USDS and lending expand, the financial flow within the entire system should grow.

Part of the value created by the protocol goes to SKY holders through staking rewards and token buybacks.

Kendrick considers staking rewards the main channel, while token buybacks play a lesser role.

Sky itself confirms that funds for rewards come from the protocol's surplus: SKY is bought on the open market and then, depending on governance parameters, may be distributed to staking participants or removed from circulation.

Where the five-fold growth forecast comes from

Standard Chartered set a target price of $0.325 for SKY by end-2028. From the level of about $0.065 used in the report, this corresponds to roughly a five-fold increase.

The bank expects that by that time the amount of value the ecosystem can transfer to SKY holders will also increase by more than five times.

The calculation is based on several assumptions at once: growth of the overall stablecoin market, increase in USDS volume, expansion of lending through Sky agents, and the protocol's economic model remaining intact.

Standard Chartered assumes that in this scenario SKY will move roughly in the same direction as Ethereum and could outperform Bitcoin in returns by end-2028.

For comparison, the bank's own forecasts for the same period are $18,000 for Ethereum and $300,000 for Bitcoin.

The forecast has serious conditions

The $0.325 target is an analytical forecast by Standard Chartered, not a guaranteed future price.

For the scenario to materialize, Sky needs to significantly increase the use of USDS and sustain demand for yield-bearing stablecoins.

Even the bank itself acknowledges that it is currently difficult to determine what share of the future stablecoin market will be captured by products that offer users yield.

There are also DeFi-specific risks: regulatory changes, fluctuations in crypto asset prices, credit risks, smart contract bugs, and changes in the governance system's parameters.

The yield on Sky's products is also not fixed. For example, the current sUSDS rate is determined by protocol governance and can either increase or decrease.

Why Standard Chartered's forecast matters more than one token price

The most interesting part of the report is not the specific $0.325 figure.

Standard Chartered essentially assumes that some functions that banks perform in the traditional financial system could gradually move to programmable infrastructure on the blockchain.

Moreover, the bank itself is already actively working at the intersection of the two systems. In 2026, Standard Chartered launched access for institutional clients to issue and redeem USDC through Circle, and in Hong Kong became the first banking distributor of the regulated stablecoin HKDAP.

Thus, the SKY forecast is not just a bet on one crypto token. It is a major international bank's bet that yield-bearing stablecoins and DeFi lending could take a significantly more prominent place in the financial system within the next few years.