Galaxy adds $100M of Sky sUSDS, accepts it as loan collateral

Galaxy Digital and Sky Protocol announced on Sept. 23 that Galaxy added $100 million of Sky’s yield-bearing sUSDS to its corporate treasury and approved the token as eligible collateral for institutional loans. Galaxy reported the $100 million position on its balance sheet and said sUSDS is now available across its institutional trading business. The firms provided no figures for client borrows secured by sUSDS or for any completed sUSDS-backed loans.

sUSDS is a savings token that keeps the same number of tokens in a holder’s wallet while the amount of redeemable USDS per token increases as the Sky Savings Rate accrues. Sky Protocol’s governance sets the Sky Savings Rate and the protocol funds payouts from aggregate surplus. The rate is variable and not guaranteed for future periods. Under the announced arrangement, institutional clients who post sUSDS as collateral continue to earn the Sky Savings Rate on the full pledged position during the loan period.

Galaxy and Sky already have a lending relationship through Grove, a Sky ecosystem agent. In July, Grove announced a $500 million warehouse facility that supplies USDS capital for institutional loans that Galaxy originates and services. Under that facility, borrower collateral had been limited to Bitcoin and Ethereum, including staked Ethereum. The sUSDS collateral approval expands the types of assets that can be used in Galaxy’s client lending operations.

A Sky Frontier Foundation update published Sept. 17 reported that Sky agents held about $304 million with Galaxy as of Sept. 1, reflecting Sky-side exposure to Galaxy before the treasury allocation. The $100 million treasury position establishes an immediate balance-sheet footprint for sUSDS at Galaxy and makes the token eligible for client lending.

The companies did not disclose any outstanding sUSDS-backed loans, aggregate client collateral amounts or details on loan terms such as interest rates and durations. The net financial result for a borrower will depend on the specific loan terms and how the Sky Savings Rate changes over the life of the loan.