After its transformation, MakerDAO received a B- credit rating—on par with the Republic of the Congo’s sovereign bonds.

Author: DLNews

Translation & Editing: TechFlow

TechFlow Intro: In August last year, S&P assigned Sky’s USDS and DAI stablecoins a B– rating—on par with sovereign bonds issued by the Democratic Republic of the Congo—placing them in the “junk bond” category. To attract institutional investors, Sky and its subDAO Spark are restructuring debt, isolating high-risk yield sources, and launching a junior capital vault. Credit ratings are becoming a critical gatekeeper for DeFi protocols seeking traditional financial capital.

• Sky aims to improve its credit rating.
• The DeFi lending protocol received a B– rating from S&P Global Ratings in August.
• Credit ratings are growing increasingly important for DeFi protocols.

Sky and its subDAO Spark plan to repackage their products, minimize exposure to risky yield sources, and introduce a new capital vault to enhance Sky’s creditworthiness in the eyes of potential institutional investors.

In August, S&P Global Ratings assigned this decentralized finance (DeFi) lending protocol a B– credit rating, placing its USDS and DAI stablecoins on equal footing with government bonds issued by the Democratic Republic of the Congo.

As the protocol seeks to attract more institutional capital, improving this rating is a top priority.

“We’ve already achieved dominance in our current market. Now we need to grow into TradFi,” Sam MacPherson, CEO of Phoenix Labs—the core development team behind Spark—and a core contributor to Sky, told DL News in an interview at EthCC Cannes.

“We’re highly focused on strengthening the weak points that more traditional institutional participants care about,” he said.

As blockchain technology gains broader acceptance and adoption among the world’s largest financial institutions, capital from traditional finance (TradFi) is flowing into DeFi.

DeFi protocols want to attract these new investors—and one effective way to do so is by securing strong ratings from reputable agencies.

Credit ratings signal to investors the likelihood that a debt issuer will default on loans or other debt instruments due to bankruptcy. They are essential for traditional financial firms because they help manage risk across financial markets.

High-yield bonds—commonly known as junk bonds—are any debt securities rated below BBB– by S&P Global Ratings or Fitch.

Senior-Junior Structure

The first step Sky and Spark plan to take is repackaging the debt backing the USDS stablecoin.

Sky users can mint USDS by depositing crypto assets—including Ethereum and stablecoins—into Sky Vaults; these deposits then generate yield. Users can subsequently exchange USDS for sUSDS—the interest-bearing version of the token—via Spark. Users cannot mint more USDS than the value of their collateral, meaning all loans are overcollateralized.

“There will be USDS, which may carry some exposure to higher-yielding products—but that exposure will be packaged in a way that satisfies rating agencies,” MacPherson said.

Meanwhile, Spark plans to isolate higher-risk, higher-yield assets into a junior risk capital vault in Q2.

“This will be a first-loss vault—riskier, but offering higher returns,” MacPherson said.

Such structured financial products are common in traditional financial markets.

When borrowers repay debt, holders of so-called senior products receive payment first—but typically earn lower returns. This makes senior products less risky and more appealing to conservative investors.

Junior products, by contrast, carry higher risk because they are paid last—but offer higher yields to compensate for potential losses.

Additionally, MacPherson said Sky and Spark have already minimized their exposure to USDe, a synthetic dollar issued by Ethena, another DeFi protocol.

S&P Global Ratings previously assigned USDe a risk weight of 1,250% in its assessment of Sky, citing the complex mechanisms used to maintain the asset’s value.

The Ratings Race

Sky is not the only crypto project paying for credit ratings.

In 2022, Compound Finance’s institutional arm, Compound Prime, also received a B– rating from S&P Global Ratings for its senior unsecured debt.

Beyond traditional rating agencies such as S&P Global Ratings, Moody’s Ratings, and Fitch Ratings, several crypto-native rating firms are emerging.

Platforms like Credora provide credit analysis and risk assessments for DeFi lending—though their ratings currently carry less weight among investors than those issued by traditional agencies.

As of March 2026, Spark’s stUSDS Vault has received a B+ rating—equivalent to BB– under traditional rating agency standards.

Securing such ratings is “extremely important” for DeFi protocols, MacPherson said.

“There’s a lot of questionable underwriting happening right now, and there’s a real need for oversight of major vault-based lending markets,” he added.

Update, April 9: This article has been updated to distinguish references to Sky and its subDAO Spark.