DeFi lender Sky hits $124m revenue record. Yet token holders aren’t impressed

Sky is the most profitable it has ever been — and it might have institutions to thank for that.

On Wednesday, the Sky Frontier Foundation released the Q1 2026 financial results for the $13 billion lender, revealing it made nearly $124 million in gross revenue, and almost $61 million in net revenue in the first three months of the year.

It’s the highest income the protocol has made since it launched as MakerDAO back in 2017.

Yet the market doesn’t seem to be impressed by the record figures. Sky’s governance token has registered a decline of around 2.4% since the results were announced publicly.

Sky, like many decentralised finance protocols, operates as a type of digital cooperative called a decentralised autonomous organisation, or DAO.

Here, those who hold the Sky governance token can suggest and vote on changes to the protocol. The Sky token trades at almost a $2 billion market value, per CoinGecko.

Sky’s record earnings come as institutional interest in onchain apps that provide yield on crypto assets continues to grow.

DeFi protocols — including Sky — are rushing to make themselves more attractive to traditional finance players by repackaging their products and paying for risk ratings from established firms like S&P Global Ratings and Fitch.

Institutional interest

In fact, its primarily institutional interest which the Sky Frontier Foundation attributes to Sky’s blow-out quarter.

Sky’s gross revenue came in at $13 million more than the nonprofit’s estimate, and was buoyed by higher-than-expected growth of the protocol’s USDS stablecoin.

“From our understanding, this outperformance in USDS growth was driven by growing institutional demand for risk-adjusted yield onchain,” the foundation said.

“Feedback across the Sky Agent Network indicates that allocators are conducting more rigorous due diligence than ever before.”

In addition to Sky beating its previous quarterly revenue record, the protocol also produced a $46 million protocol surplus against a net loss of $13.5 million in the same quarter last year.

Protocol surplus refers to the revenue the protocol made over a target previously set by governance participants.

No buybacks?

One potential reason the positive results haven’t translated into more interest in the Sky governance token is the protocol’s hesitancy to conduct buybacks.

On March 14, Sky Governance approved a capital restructuring that shifted how the protocol allocates surplus funds. Rather than directing the majority of earnings to token buybacks and staking rewards, that money now goes towards building a $150 million solvency reserve.

While such a fund improves Sky’s resilience, and may help institutional investors feel more comfortable using the protocol, it does little to immediately impact the Sky token’s value.

“The message we observed from Sky Governance is that Sky Protocol is building for long-term resilience over short-term distributions,” the Sky Frontier Foundation said.

“Sky Reserves currently stand at $50.90 million, and as reserves grow toward the target, buyback and distribution rates will scale back up.”

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.