GM. This is Milk Road PRO, your fundamentals-first detective, following the revenue trail while “everything rally” believers search for their missing hopium.
Crypto has been having a rough few months.
Prices are down, and sentiment is weak.
But something interesting is happening under the surface.
A few tokens are no longer moving with the rest of the market. Their prices are doing their own thing instead of following the usual ups and downs.
So we are going to call it:
- ❌ The “everything rally” is dead.
- ✅ The “great decoupling” is here.
What we mean here is quite simple.
Not every crypto token will go up again.
👉 But tokens backed by strong businesses, durable revenue, and real growth plans can move on their own, ignoring the rest of the market.
One of those tokens is SKY. Since late November 2025, SKY has been showing real strength.
While most of the market struggled, SKY did exceptionally well.
When you compare it to big names like BTC, ETH, total crypto market cap, or simply against $, the difference stands out.
👉 SKY showed impressive resilience at a time when almost everything else was falling.
It is not a coincidence.
Sky’s 2025 earnings report makes this even clearer:
- Its stablecoin supply grew 74% year over year, reaching $9.2B.
- Revenue also climbed 10% year over year to $338M.
All of this happened in a year when the broader crypto market was down.
✍️ So the recent price action just makes the story more obvious to everyone.
And more people are starting to notice the gap.
They are trying to understand what is really driving this kind of strength and why some assets like SKY keep outperforming while others fall behind.
And it is not just about strong performance and steady revenues, it is also about their bright future.
👉 One of our key themes for 2026 is that more credit and yield are moving onchain, and Sky is in the best position to capture that shift.
Because of that, it really feels like 2026 could be Sky’s year.
👉 With strong price action, improving fundamentals, and accelerating expected growth, SKY's valuation at an 8 P/E ratio still looks like the most undervalued token in the entire crypto market.
Editor’s note: We actually sat down with Sky’s founder to understand how the team is thinking about onchain credit, the Agent Network, and where real growth will come from next.
So today, we want to revisit our thesis and update our view on this protocol that is still overlooked by many:
- Sky’s growth and financials in 2025.
- The unique edge that sets Sky apart.
- What could drive profits even higher?
- The key risks and challenges ahead.
- What is our price target for SKY?
We are very excited about all this, so let’s get right into it.
Sky in 2025
If you are new to Sky, we recommend starting with our previous Sky report, where we break down the basics. The quick tl:dr is that Sky is a DeFi protocol that has essentially created a tokenized money market fund. They allocate across a diversified source of yield in crypto, private and public markets, wrap that yield in a stablecoin wrapper and the result is sUSDS - the largest yield-generating stablecoin in the world.
PS: sUSDS is Sky’s yield-bearing stablecoin, while USDS is the standard non-yield-bearing stablecoin. Sky generates its revenue by taking the surplus from the yield it generates vs the yield it provides to its stablecoin holders. This is very much a simplified version, but it’s directionally correct.
To start, let’s focus on understanding Sky’s business and financials in 2025 because that’s likely the main driver behind their recent outperformance.
The good thing about doing analysis on Sky is that they release quarterly and annual earnings reports, similar to public companies. You can read their latest report here, which includes projections for 2026.
In short, 2025 was a very strong year for the protocol on many fronts, as you can see. The only number that might not please SKY investors is a drop in their net profits.
But we know what caused that drop:
One-off transformation costs tied to the upgrade from the Maker to the Sky ecosystem, along with the technical investments needed to launch the Sky Agent Network (it will be explained later).
This work is now done, and these costs are not expected to repeat in 2026, marking the end of a heavy investment phase.
Revenues from November and December 2025 were delayed and will be recognized in Q1 2026 due to a slower accounting settlement cycle.
The monthly settlement cycles will move to daily settlement cycles, bringing more accurate and more transparent timely data.
So people who only look at the top-line numbers without digging deeper might miss these important dynamics, and that is exactly where opportunities are created. 🤗
And for those who understand Sky well, they keep adding more, because its success story is becoming clearer by the day.
We really appreciate that Sky is now publishing regular investor reports, sharing key data along with clear guidance for the future - this is the only way institutional investors will buy our bags. ;)
Let’s have a look at the 2026 projections next.
Sky in 2026
The Sky Frontier Foundation (SFF), which prepares Sky’s financial reports, made their own projections. However, we should take them with a grain of salt, as they may be biased. This is why we will also build our own model and use them later for comparison.
Here is what SFF expects for Q1 and for the full year 2026.
USDS supply is expected to reach $11.5B by the end of Q1 and grow to $20.6B by the end of the year, which would mean 104% YoY growth.
SFF also expects this expansion to fuel strong growth across the business.
Gross protocol revenue is projected to rise 81% YoY to $611.5M, while protocol profits are expected to surge 198% YoY to $157.8M in 2026.
They can project as much growth as they want, but they still need to provide clear reasons for it to happen. So here are the three key drivers that SFF believes will support that growth.
1. Marketing & BD
Marketing and business development across the ecosystem have picked up in early 2026 and will continue throughout the whole 2026.
👉 Independent participants are pushing partnerships and awareness campaigns to drive USDS adoption across institutional finance, fintech, and DeFi.
2. Expansion of Sky Agent Network
Sky plans to expand its Agent Network by launching more agents (more yield operators and more yield allocators), potentially up to 10 by the end of 2026.
If you don’t understand those terms, you can learn all about them here.
👉 What it means in simple words is that more unique yield opportunities will be available for Sky.
Here’s a high-level look at where they’re going and what they’re planning to bring in:
- Public credit: Tapping into liquid fixed-income markets to put some excess capital to work more efficiently.
- Crypto Capital Markets: Offering institutional liquidity solutions like OTC lending and financing for market makers.
- AI compute: Creating credit structures around GPUs, data centers, and other AI-related spending.
- Energy infrastructure: Funding renewable energy projects, grid upgrades, and sustainable power storage.
- TradFi structured credit: Tokenizing traditional debt products like CLOs and private credit portfolios to bring them onchain.
Sounds promising, right? But what if it's just clever marketing and not that simple in real life?
Normally, that might be the case.
But here’s the thing: a new Sky Agent called Obex launched in 2025 with the purpose of incubating new agents.
Think of Obex like Y Combinator, but focused on new stablecoin startups that want to bring some unique yields onchain.
And Sky has already approved up to $2.5B allocation into these new agents (startups) that are going to be incubated by Obex.
So this isn’t just talk.
It’s already happening. And Sky has a major advantage because they have around $10B on their balance sheet.
✍️That kind of capital draws in every serious startup trying to bring strong yield strategies onchain.
Like we pointed out in our last report, there are already strategies out there managing hundreds of millions in assets, and they’re still offering double-digit APYs.
👉 Through newly created agents, Sky will tap into those opportunities to boost their yields and keep growing their supply.
Because the better the yield you offer, the higher the demand.
And lastly, they want to integrate the largest stablecoin in the world.
3. USDT integration
Sky has focused thus far on integrating USDC, the second-largest stablecoin in the world. They now have more than $4B of USDC liquidity, which allocators can swap between USDS and USDC with 0 slippage. Opening the protocol to the world's largest stablecoin, USDT, could expand Sky’s market and help it capture Tether capital at scale.
So those are the main drivers of Sky’s growth in 2026 according to SFF.
They sound reasonable.
But before we share our own projections and walk through our model, we want to highlight one important point about Sky that many people still overlook.
This is critical to understand because it is a key input we need to factor into our model.
That’s the story and the role of DAI.
Uh, Oh… 😧 The rest of this report is exclusive to Crypto PRO or PRO All Access members!
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WHAT’S LEFT INSIDE? 👀
- Why is DAI so important for Sky?
- How could Sky lose most of its profits?
- What is their biggest challenge?
- How big is the upside for SKY?
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