USDS (USDS)

@SkyEcosystem has been the leader in multi-collateral backed stablecoins and makes up 4% of the global stablecoin supply across its 2 tokens: USDS and DAI

From its origin as MakerDAO to its evolution into Sky Protocol, the project has built one of crypto's most sustainable and resilient yield-generating stablecoin businesses

Using Sky as a case study, we can understand how multi-collateral backed stablecoins work, their strengths and tradeoffs, and how they measure up to the majority-fiat backed model (covered in Pt 1). Some highlights 🧵

Excited to announce the launch of the Stablecoin FX Layer, built on Spark's coordination framework and Uniswap v4.

We are entering a world where every exchange, fintech, and bank is launching their own stablecoin. These “everything apps” (EAs) will compete to move users into their own ecosystems.

We will see stablecoin adoption increase by an order of magnitude as payments come on-chain. This new adoption will be fragmented across the various EAs, straining the current market-making environment.

Built on Uniswap v4, Spark is uniquely positioned to bootstrap the on-chain FX layer for EAs to swap excess inventory into their own stablecoin. Access to the liquidity of the largest on-chain stablecoin, USDS, provides a fundamental advantage that enables the economics to work at scale.

Since USDS is backed by other fiat-backed stablecoins rather than off-chain deposits, the opportunity cost of holding stablecoin inventory is effectively zero as it is required to maintain the peg. Combine this with Spark's automa

Spark just built something important for the entire stablecoin market.

A shared liquidity network on @Uniswap v4 where stablecoin issuers connect to common pools instead of each building their own.

With USDS at the center of routing, growth across the network can strengthen demand for USDS.

Read the full breakdown ↓