S&P Global Ratings has assigned a B- issuer credit rating to Sky Protocol, marking the first major credit rating for a decentralized finance (DeFi) platform as of August 8, 2025.

This rating is part of S&P's broader initiative to expand its focus on blockchain-based finance, which includes recent assessments of tokenized treasury funds and blockchain mortgage securitizations.

Despite challenges, Sky Protocol has demonstrated operational strengths, with minimal credit losses since 2020 and diversified liquidity reserves.

The establishment of credit benchmarks could allow DeFi exposure to satisfy regulatory mandates requiring minimum credit ratings.

Andrew O'Neil, S&P's digital assets analytical lead, noted that the 'B-' rating indicates the protocol can meet its financial obligations but remains vulnerable to adverse conditions.

The stable outlook suggests that S&P expects current risk factors to remain stable over the next year, with potential upgrades contingent on improvements in governance and capital adequacy.

Key risks identified by S&P include high depositor concentration, centralized governance, reliance on the founder, regulatory uncertainty, and weak capitalization.

S&P highlighted significant constraints for the rating, including governance centralization, with co-founder Rune Christensen holding nearly 9% of governance tokens.

S&P's Stablecoin Stability Assessment rated USDS's ability to maintain its peg to the US dollar as '4', indicating a constrained ability to maintain its value.

Sky Protocol, previously known as Maker Protocol, operates on the Ethereum network and issues the USDS stablecoin, which has a market capitalization of approximately $7.1 billion.

USDS is the third largest stablecoin, following USDT and USDC, and plays a crucial role in facilitating lending and borrowing transactions on the platform.

The protocol's risk-adjusted capital ratio was noted to be just under 0.5%, raising concerns about its ability to cover potential credit losses.