Algorithmic / under-collateralized stablecoin
Sky Lending (formerly MakerDAO)'s assessment for RD-F-069 — scored green on the v1.7.0 rubric. The evidence below is the curator's reasoning for this score.
Evidence summary #
USDS is fully over-collateralized CDP-minted stablecoin. Every USDS backed by collateral at LR >= 110% (typically 150%+). PSM holds 1:1 USDC. RWA legally backed. Not algorithmic, not under-collateralized.
Detail #
Sky Protocol uses over-collateralization: users lock ETH/wBTC/stETH/RWA at minimum liquidation ratios (130-200% depending on collateral type) to mint USDS. PSM holds USDC 1:1 for PSM-minted USDS. The protocol has a MKR/SKY lender-of-last-resort mechanism for any shortfall. This is definitively the opposite of algorithmic or under-collateralized stablecoin design (contrast: Terra/Luna which had no exogenous collateral). S&P rated Sky B- stable citing 'solid liquidity reserves' (coinlaw.io citing S&P).
Sources #
- Docs
- The Sky Protocol: Sky's Multi-Collateral Dai (MCD) SystemSky Protocol whitepaper — over-collateralized CDP architectureretrieved 2026-04-27
Methodology #
Classify whether the protocol is an algorithmic or under-collateralized stablecoin design per curator classification.
See the full factor methodology and distribution across all protocols →