How Sky Savings extends yield offerings with Morpho
$300M+
$400M+
5 Vaults
"By becoming a vault curator on Morpho, we're expanding access to Sky Savings denominated in USDC and USDT, representing over $280 billion in stablecoin capital."Rune Christensen, Co-Founder of Sky Protocol and Director at Sky Frontier Foundation
The Opportunity
Sky has been building onchain financial infrastructure since 2014, when the project was known as MakerDAO. The protocol was among the first to build overcollateralized lending onchain with DAI, and has since expanded into a full savings ecosystem around USDS, Sky Savings.
Sky Savings historically have been denominated in USDS and a suite of Sky-native assets. Holders of emerging stablecoin ecosystems like USDC or USDT had no direct way to participate in Sky Savings, except for converting into USDS and earning yield at the Sky Savings Rate, or using other protocols such as Spark. As USDT and USDC continued to grow, Sky Savings’ TAM kept expanding from its $10B+ ecosystem to over $260B+ in total stablecoin capital.
Sky’s opportunity is to bring USDC and USDT deposits into its savings ecosystem without requiring holders to convert their stablecoins and without building a new lending protocol from scratch.
The Solution
Sky became a curator on Morpho.
Rather than building its own lending market to accept USDC and USDT deposits, Sky Protocol plugged into Morpho’s existing network, where billions in borrowing demand was already active. This meant Sky could launch vaults that were immediately accessible to borrowers, instead of spending months bootstrapping two-sided liquidity from scratch.
Sky Protocol deployed five savings vaults directly through the sky.money interface, each targeting a different risk and asset profile. The key unlock: USDC and USDT holders can now earn yield on Sky Savings without converting to USDS first. A USDT depositor in the USDT Savings vault available in the sky.money interface earns yield generated from sUSDS-collateralized borrowing, with their funds deployed into Morpho’s lending markets.
On the collateral side, sUSDS and stUSDS became collateral types on Morpho, meaning any curator on Morpho could create lending markets against them. Sky did not need to convince individual protocols to integrate its tokens. By listing them on Morpho, it tapped into an open market where risk curators and vault managers independently chose to allocate into lending markets backed by Sky-native assets.
The Results
Sky Protocol’s Morpho Vaults have attracted over $300M in deposits across the five vaults since launch.
sUSDS has become one of the most widely used collateral assets on Morpho, backing over $325M in lending markets on Morpho.
In total, Sky-native assets back over $400M in lending markets on Morpho. This is the network effect that would not have existed if Sky Protocol had deployed its own fork.
The net effect: Sky’s savings products now accept stablecoin liquidity denominated in USDC and USDT. That brought new deposits into Sky’s ecosystem, gave sUSDS and stUSDS holders deeper liquidity to borrow against, and grew Sky’s footprint across DeFi without Sky Protocol having to build or run its own infrastructure.