Written by: Xiaobing
Galaxy Digital announced on September 23 that it has added $100 million of Sky Protocol's yield-bearing stablecoin sUSDS to its corporate treasury. The funds came from Galaxy's own balance sheet; as of June 30, Galaxy held nearly $2.5 billion in cash and stablecoins.
Galaxy also announced two other things: it approved sUSDS as collateral for its institutional trading business (which has an average loan book size of $1.4 billion and serves more than 1,600 counterparties), and it purchased an undisclosed amount of SKY governance tokens.
Galaxy says it is the first publicly listed company to hold sUSDS.
A financial company listed on Nasdaq has put a DeFi protocol's yield-bearing stablecoin into both its corporate treasury and its list of collateral for institutional lending.
What is sUSDS?
sUSDS is the yield-bearing stablecoin of Sky Protocol (formerly MakerDAO). Users deposit USDS into the Sky Savings Rate contract and receive sUSDS as a receipt. sUSDS appreciates as the savings rate accumulates. As of the end of Q2, sUSDS supply reached $5.52 billion, up 149% year over year. Sky Protocol's estimated total revenue for 2025 is about $611 million.
The logic behind Galaxy buying sUSDS is straightforward: rather than letting $100 million in idle stablecoins sit in a bank account earning bank interest (the current federal funds rate is 4%, but corporate accounts cannot get all of it), it is better to deposit them into sUSDS and earn the Sky Savings Rate. This is an optimization decision in treasury management, replacing traditional short-term cash management tools with an on-chain yield product.
But the significance of this transaction goes far beyond interest rate arbitrage.
Three-layer integration: treasury + collateral + governance
In this transaction, Galaxy simultaneously occupies three positions:
Treasury holder. The $100 million in sUSDS appears directly on Galaxy's corporate balance sheet. This means Galaxy's quarterly financial reports will reflect the value changes and yield accumulation of this holding. For a public company, the appearance of a yield-bearing token issued by a DeFi protocol on its balance sheet is a new precedent at the accounting and auditing level.
Collateral acceptor. Galaxy's institutional clients can now use sUSDS as loan collateral, and continue to earn the Sky Savings Rate while it is pledged. Traditional collateral (BTC, ETH, Treasuries) does not generate yield after being pledged, while sUSDS continues to accumulate interest after being pledged. For borrowers, this reduces the opportunity cost of collateral. For Galaxy, the collateral itself is appreciating, which is equivalent to adding an automatic safety buffer to the loan.
SKY holder. Buying SKY governance tokens means Galaxy is not only a user of the Sky protocol, but also a participant in its governance. The exact words of Greg Feibus, head of global capital markets at the Sky Frontier Foundation, were: "Holding SKY reflects the breadth of this integration across treasury and lending. Galaxy believes that Sky's ability to generate meaningful protocol revenue across various market environments, as well as the growing institutional adoption of its broader ecosystem, are central to the investment thesis."
Taken together, these three layers mean Galaxy has effectively become a "full-stack customer" of the Sky protocol: it uses Sky's products to manage its treasury, uses Sky's assets as lending collateral, and also holds Sky's governance tokens to participate in decisions about the protocol's direction.
Grove and the $500 million warehouse financing
The background of the transaction is deeper than the announcement shows.
Within Sky's ecosystem, Grove serves as a Prime Agent and currently provides Galaxy with a $500 million warehouse financing facility, and the two sides are reportedly discussing expanding the size of this facility.
This means the flow of funds is bidirectional: Galaxy deposits money into sUSDS to earn yield, while at the same time Sky's ecosystem, through Grove, provides lending funds to Galaxy to support Galaxy's institutional business. Galaxy is both a depositor of Sky and a borrower from Sky.
This kind of bidirectional binding of "I deposit in your product, you provide me with credit" is called "relationship banking" in traditional finance, and Galaxy and Sky are replicating this model in DeFi.
Industry signal: from companies buying BTC to companies buying yield
MicroStrategy started the precedent in 2020 of "public companies putting BTC into their treasuries." Five years later, what Galaxy may be starting is the next stage: "public companies putting DeFi yield-bearing assets into their treasuries."
The difference between the two is fundamental. BTC is a zero-yield asset, and the return from holding BTC comes entirely from price appreciation. sUSDS is yield-bearing; even if the price does not move, holders continue to accumulate the protocol rate. For corporate financial managers, the latter is far easier to justify in cash flow planning and asset allocation than the former.
If sUSDS performs well on Galaxy's balance sheet, with stable yield, sufficient liquidity, and no audit obstacles, then other crypto companies holding large amounts of stablecoins (Coinbase holds billions in USDC, Circle itself, Tether, etc.) will have a precedent they can refer to.
Sky Protocol's $5.5 billion sUSDS supply may only be the starting point for enterprise-level demand. When the CFOs of public companies begin to compare DeFi yields and Treasury yields in the same Excel spreadsheet, the demand curve for on-chain yield-bearing assets will be permanently raised.
Galaxy cast a vote with $100 million in real money, and the significance of this vote may far exceed the $100 million itself.
