This episode of The Rollup features Rune Christensen, founder of Sky, detailing how Sky is engineered to attract hyper-rational capital and scale its USDS stablecoin through a decentralized ecosystem of specialized agents, positioning itself for the anticipated trillion-dollar stablecoin supercycle.
The Stablecoin Supercycle and Circle's Impact
- Rune Christensen, founder of Sky, views Circle's recent IPO success, trading significantly above its initial valuation, as a validation of stablecoins being the "most interesting and most powerful use case of crypto."
- He notes a "Tesla-like FOMO" for stablecoin exposure, suggesting this enthusiasm will benefit the broader DeFi space, including advanced decentralized stablecoins like Sky's USDS.
- Rune believes the market interest in established players like Circle will eventually lead to a deeper understanding and appreciation for more sophisticated DeFi solutions.
- "It's always been clear to me that stable coins are just the most interesting and most powerful use case of crypto." - Rune Christensen
Sky's Onchain Vision and USDS Growth Strategy
- Sky is positioned as a DeFi-native alternative to centralized stablecoins, focusing on permanent protocol revenues and stablecoin payouts to foster robust growth for USDS.
- The conversation highlights Sky's evolution, with USDS now boasting an $8 billion total supply and a unique flywheel mechanism.
- Rune explains that current demand for SUSDS (the savings version of USDS) primarily comes from institutional and very large-scale users, a shift from the original "OG Dai user" base.
- Dai: An earlier decentralized stablecoin launched by MakerDAO, which Rune co-founded. Dai gained a grassroots DeFi audience but faced limitations in broader adoption due to branding and complexity for non-DeFi natives.
- The introduction of USDS and SUSDS aims to appeal to a wider audience by simplifying the user experience and branding.
Targeting "Mercenary Capital" and Multi-Chain Presence
- Rune Christensen articulates that the ultimate target user for USDS and SUSDS is "mercenary capital"—hyper-rational, institutional actors seeking the best risk-adjusted returns.
- SUSDS is live on Optimism and Uni chain, chosen for their strong DeFi-specific use cases.
- Optimism: A Layer 2 scaling solution for Ethereum, designed to offer faster and cheaper transactions.
- Uni chain: Likely a reference to a chain focused on or heavily integrated with Uniswap, a leading decentralized exchange.
- The strategy is to optimize USDS for these discerning users, believing that a product catering to the "pickiest" will also serve regular retail users well.
- "Basically, you have to offer the absolute best riskadjusted return or they're going to they're going to jump ship, right?" - Rune Christensen
- Strategic Implication: Investors should note Sky's focus on delivering superior, dynamically adjusted yields, which could attract significant capital flows if successful, especially from algorithmically-driven funds.
The Sky Agent Framework and Star Agents
- Sky's ecosystem is designed around the Sky Agent Framework, which utilizes tokenized agents to subdivide the system into specialized areas of focus, allowing communities to target specific market opportunities for USDS.
- This framework enables different groups to bring USDS to various markets, such as financial inclusion in South America, and profit from acting as a distribution layer.
- Star Agents (Stars): These are described as the "workhorse of the Sky ecosystem," essentially business entities that focus on niche markets or strategies. They deploy the collateral backing USDS, competing and cooperating to manage the portfolio efficiently.
- Stars influence USDS rates by finding new yield opportunities (e.g., real-world assets or TradFi assets – assets from traditional finance).
- When a Star deploys collateral, it must provide risk capital, taking the first loss before Sky or USDS holders are affected.
Automated Rate Setting and Robust Risk Management
- The SP Beam, or Rate Setter, is a key component that will adjust USDS savings rates, though it's not yet fully operational due to the nascent stage of active Star agents.
- As Stars find better risk-adjusted returns and increase USDS supply, the Rate Setter will automatically increase rates if demand doesn't keep pace, ensuring users receive the best possible market-sourced savings rate.
- Sky Core implements advanced risk management frameworks based on Basel (international banking regulatory standards), prioritizing user fund safety above all else.
- Basel Accords: A set of international banking regulations developed by the Basel Committee on Banking Supervision, focusing on capital adequacy, stress testing, and market liquidity risk.
- Actionable Insight for Researchers: The interplay between competitive Star agents and the automated Rate Setter presents a novel mechanism for decentralized interest rate discovery. Monitoring its effectiveness and resilience will be crucial.
DeFi Composability and the Role of Spark
- Rune highlights Sky's ability to integrate with established DeFi protocols, allowing USDS holders to tap into diverse yield sources.
- Protocols mentioned include Aave, Ethena, Morpho, Maple, Fluid, and Pendle.
- Aave: A decentralized lending and borrowing protocol.
- Ethena: A protocol offering a synthetic dollar, USDe, backed by crypto assets and corresponding short futures positions.
- Morpho: A DeFi protocol that optimizes lending and borrowing rates on platforms like Aave and Compound.
- Maple Finance: An undercollateralized lending protocol for institutions.
- Fluid: (Context suggests a lending or liquidity protocol).
- Pendle: A protocol that tokenizes and trades future yield.
- Spark: The first Star agent, responsible for managing a significant portion of the collateral portfolio and interoperating with these DeFi protocols.
- This structure allows Sky to maintain a secure overall framework while enabling Stars like Spark to be agile, innovative, and profit-driven in tapping into DeFi opportunities.
- "Sky is using its own sort of governance uh cycles to just build the overall framework and then basically say look this is what the overall framework looks like. you can sort of play around within that but you can't break these rules right?" - Rune Christensen
The Future of Stablecoins and Sky's AI-Driven Competitive Edge
- With the stablecoin market cap projected to grow from ~$250 billion to $1.5 trillion, Sky's strategy hinges on fostering its ecosystem of Star agents.
- Rune envisions an "exponential bet" where the collective, decentralized knowledge within the Star ecosystem allows new Stars to rapidly adopt best practices and technology.
- He foresees an "AI arms race" where both capital deployers and end-users increasingly rely on AI to optimize returns and select financial products.
- Sky aims to be the preferred stablecoin for these AI-assisted decision-makers by offering superior, transparent, and market-driven yields with low spreads.
- Strategic Implication for Crypto AI Investors: Sky's architecture is designed to appeal to AI-driven investment strategies. As AI tools for yield optimization become more prevalent, platforms like Sky, which cater to hyper-rational, data-driven decisions, could see increased adoption.
- "Increasingly uh it's clear that if you want to have a chance at actually delivering a competitive risk adjusted return for your customers, you have to deploy you know um increasingly sophisticated uh you know datadriven AI models and and just like automated solutions to this, right?" - Rune Christensen
Conclusion: Decentralized Intelligence for Stablecoin Dominance
- Sky's strategy leverages a decentralized network of specialized agents and AI-influenced mechanisms to offer superior risk-adjusted returns, positioning USDS for significant growth in the expanding stablecoin market. Crypto AI investors and researchers should monitor the development of Sky's Star ecosystem and its ability to attract AI-driven capital allocation.
