Institutional Use of Sky Protocol Deepens in Q3 as Net Revenue Rises 11.8% and Galaxy Adds $100M of sUSDS to Its Balance Sheet

Moody's assigns its first counterparty risk rating to Sky Protocol; Net Revenue reaches $37.19M, reinforcing reserves.

GRAND CAYMAN, Cayman Islands, Oct. 29, 2026 /PRNewswire/ -- Sky Frontier Foundation today released the Sky Ecosystem Q3 2026 Quarterly Report, highlighting a landmark quarter defined by accelerating institutional adoption, a wider Net Revenue margin, and reinforced Sky Reserves.

In Q3, Galaxy Digital incorporated $100M of sUSDS onto its corporate balance sheet and approved the asset as eligible collateral across its institutional lending operation. Net Revenue was positive for the sixth consecutive quarter, reaching $37.19M, an 11.8% increase quarter-over-quarter, and the Net Revenue margin widened from 31.0% to 37.5%, while sUSDS circulating supply more than doubled year-over-year to $4.52B.

"For years, the industry asked when institutions would arrive onchain. Q3 showed that they are already integrating at the balance-sheet level," said Rune Christensen, Co-founder of Sky Protocol and Director of Sky Frontier Foundation. "Galaxy putting sUSDS on its corporate balance sheet and as collateral across its lending business shows what happens when a protocol operates with transparent, rules-based financial discipline. We're proving that onchain finance can meet the balance sheet standards of institutions"

Q3 2026 Financial & Operational Highlights

• Net Revenue: $37.19M (+11.8% vs. Q2 2026)
• Net Revenue Margin: Widened to 37.5% (up from 31.0% in Q2)
• Gross Protocol Revenue: $99.29M (+14.2% YoY; $397.2M annualized run-rate)
• Total Expenses: $62.10M (down 16.0% vs. Q2)
• Sky Reserves: $28.47M remitted in Q3, compared with a $2.64M deficit in Q3 2025; Sky Reserves stood at $85.08M at quarter end against the $150M medium-term Solvency Reserve target
• sUSDS Supply: Reached $4.52B (+118% YoY), climbing further to $4.72B on October 21
• Protocol Collateral: Stood at $11.41B (+25.3% YoY)

Institutional Integration & Independent Assessment 

The quarter marked several institutional milestones:

• Galaxy Strategic Integration: On September 23, Galaxy added $100M of sUSDS to its balance sheet and approved sUSDS as eligible collateral across its institutional lending business, which carries an average loan book of $1.4B. The $500M senior secured credit warehouse for Galaxy, using USDS liquidity provided through Sky Agent Grove, funded $375M in loans by quarter-end.
• Credit & Research Milestones: Standard Chartered initiated research coverage of SKY on September 11. After quarter end, on October 7, Moody's assigned its first counterparty risk rating to Sky Protocol, making it the first stablecoin protocol rated by both Moody's and S&P Global.
• Institutional Counterparty Ecosystem: Positions held through Sky Agents were diversified across premier institutions, including BlackRock (BUIDL), Securitize (STAC), Janus Henderson, PayPal USD, and Anchorage.

Lower Expenses Drive Margin Expansion 

Total expenses dropped 16.0% quarter-over-quarter to $62.10M, outpacing a 7.4% decline in Gross Protocol Revenue ($99.29M). This widened the Net Revenue margin to 37.5%. Cost reductions were led by lower Sky Savings Rate payments as average sUSDS balances declined ($41.94M, down 22.2%) and a 46.2% decrease in Integration Expenses. Total expenses also absorbed a non-recurring $3.02M legacy asset write-off.

Net Revenue Allocation: Reserves First, Followed by Programmatic Buy & Burn 

Under Stage 2 of the buybacks framework, approved by Sky Governance on August 13, Net Revenue is allocated each monthly settlement cycle:

• Solvency Priority: Up to 50% of monthly Net Revenue is channeled directly to Sky Reserves until the $150M medium-term Solvency Reserve target is met ($85.08M reached as of Q3 close).
• Buybacks, Staking Rewards & First Token Burn: $5.60M was deployed toward open-market SKY purchases in Q3. A total of $3.12M in USDS was distributed to SKY stakers, and on September 13, 2.86M SKY was permanently burned, marking the protocol's inaugural programmatic burn. A further 7.37M SKY earmarked in September was burned on October 12. Staked SKY reached 74.6% of circulating supply.

Outlook 

Q4 began with sustained tailwinds. Circulating sUSDS reached $4.72B on October 21 (+4.6% from quarter-end), and the Sky Savings Rate rose to 3.80% on October 7. Once Sky Reserves reach the $150M medium-term Solvency Reserve target, the SKY buyback allocation will adjust its allocation of Net Revenue programmatically under current parameters without further governance action.

About Sky Frontier Foundation

Sky Frontier Foundation is an independent organization that supports research, education, and ecosystem development for Sky Ecosystem.

Forward-Looking Statements

This press release contains forward-looking statements that are inherently uncertain and not guarantees of future performance. Actual results may differ materially due to market volatility, regulatory developments, and decisions made through decentralized governance. Sky Frontier Foundation is an independent entity, does not control the Sky Protocol or its DAO governance processes, and undertakes no obligation to update forward-looking statements. Nothing in this press release constitutes legal, financial, investment, or tax advice, or an offer or recommendation to buy or sell any token, security, or other financial instrument.  SKY buybacks and burns are carried out programmatically and automatically by the Sky Protocol smart contracts under parameters set by Sky Governance, which may change them or set them to zero. SKY buybacks, burns and staking rewards are not intended to provide, and do not guarantee, any return to SKY holders.

SOURCE Sky Frontier Foundation