Moody’s rates a stablecoin protocol for the first time:Sky Protocol receives B3 with a stable outlook
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AT A GLANCE
Sky Protocol received from Moody’s a B3 long-term counterparty risk rating with a stable outlook, but its capital position was identified as a material credit weakness.
Article
Sky Protocol received Moody’s first rating of a stablecoin protocol, with approximately 10000000000 USD but tangible common equity was only 90000000 USD BlockBeats reported that October 8, the decentralized finance (DeFi) protocol Sky Protocol was awarded a B3 long-term counterparty risk rating by credit rating agency Moody’s, with a stable outlook; this marked Moody’s first rating of a stablecoin protocol.
As of September，Sky Protocol it held approximately 90000000 USD in tangible common equity, corresponding to approximately 10000000000 USD in tangible assets under management. Moody’s described its capital position as a “material credit weakness.”Sky Protocol formerly known as MakerDAO, is responsible for managing the USD-pegged USDS and DAI.
Moody’s noted that Sky Protocol approximately 45%to 50%of its assets consisted of stablecoins and tokenized money market funds, while approximately 25%consisted of cryptocurrency-collateralized loans. Its rating was also constrained by a low capital adequacy ratio, confidence-sensitive stablecoin liabilities, and risks related to the DAO structure. (Bitcoin.com News)
Original link https://m.theblockbeats.info/flash/370681
Key points
01
Moody’s awarded Sky Protocol B3 a long-term counterparty risk rating with a stable outlook.
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The report stated that this was Moody’s first rating of a stablecoin protocol.
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As of September，Sky Protocol it held approximately 90000000 USD in tangible common equity, corresponding to approximately 10000000000 USD in tangible assets under management.
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Moody’s described Sky Protocol capital position as a “material credit weakness.”
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Sky Protocol formerly known as MakerDAO, is responsible for managing the USD-pegged USDS and DAI。
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Sky Protocol Approximately 45%to 50%of its assets consisted of stablecoins and tokenized money market funds, while approximately 25%consisted of cryptocurrency-collateralized loans.
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The rating was also constrained by a low capital adequacy ratio, confidence-sensitive stablecoin liabilities, and risks related to the DAO structure.
AI-assisted interpretation
The following is analysis, separate from reported facts. Verify important claims independently.
This means that Moody’s assigned Sky Protocol a B3 rating and considered its outlook stable. However, its tangible common equity was small relative to the scale of its tangible assets under management, leading Moody’s to classify its capital position as a material credit weakness; its asset composition and DAO structure were also identified as rating constraints.
Why it matters to readers
This was described in the material as Moody’s first rating of a stablecoin protocol, providing Sky Protocol and the credit risk of stablecoin protocols with a rating reference.
Tangible common equity can be understood as the amount of equity available to the protocol to absorb losses; a low capital adequacy ratio indicates that the buffer may be weaker. The material did not indicate that USDS or DAI had depegged or experienced a run.
Risks and unknowns
The material did not include Moody’s original rating announcement, so the rating details still require verification.
The material did not specify the B3 complete rating definition.
The material did not provide a specific capital adequacy ratio.
The material did not indicate that USDS or DAI had experienced depegging, redemption pressure, or a run.
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Related concepts
Stablecoin
An asset that seeks to track a reference value and is subject to risks including depegging, reserves, and redemption.
