Standard Chartered Makes Bullish Call on SKY, Sees Token Rising 5x by 2028

Global investment bank Standard Chartered has started tracking the SKY token, setting a bullish target about five times its current price. The bank projected SKY to hit $0.325 by the end of 2028, from its price of $0.065 at the time the report was written.

Standard Chartered compares Sky to a "Federal Bank"

Geoff Kendrick, Standard Chartered's global head of digital assets research, issued a highly bullish target for the Sky token. He described the DeFi platform, which rebranded from the project formerly known as MakerDAO, using terms used for traditional financial institutions. 

He said the project "issues stablecoins, operates its own governance system, and charges interest to borrowers," tagging it a "federal bank."

According to Kendrick, most of the value that goes to SKY holders comes through staking rewards, with token buybacks contributing a smaller share. He added that as usage of Sky's USDS stablecoin grows and lending activity expands, the value passed on to token holders could increase as well.

Sky holds the position of the third-largest stablecoin issuer, behind Tether and Circle, according to data from DeFiLlama.

Stablecoin market cap ranking. Source: DeFiLlama

The platform is also at the top of the yield-bearing stablecoin category. Its yield-bearing product, sUSDS, has attracted around $4.5 billion in total value locked and offers an annual percentage yield of about 3.6%.

SKY Token projected to outpace Bitcoin's growth by 2028

Kendrick's outlook suggests that the SKY token will move in line with Ethereum's trajectory in the next few years while outperforming Bitcoin. 

Before now, Standard Chartered forecasted ETH to reach $18,000 and  BTC to hit $300,000 by the end of 2028, which means the bank sees SKY's growth outpacing the pioneer crypto.

At the time of the report, SKY was trading at around $0.058, down about 2% from the previous day.

The bank’s bullish thesis was based on how Sky generates revenue. The platform lends out its USDS stablecoin to a small group of agents, which then deploy that capital into other yield-generating strategies. Three major agents, Spark, Grove and Obex, together held $5.9 billion in USDS borrowings at the time the report was published.

The borrowing caps for the three agents currently sit at $17.5 billion, well above the amount already borrowed.  Kendrick estimated that if the agents keep borrowing till they hit the cap, it could bring another two to three times growth for the ecosystem, assuming interest rate spreads hold steady.

He also noted that the caps could be raised higher or new agents added over time. Sky's dashboard currently shows that $4.79 billion has been deposited into USDS savings. About $5.5 billion has been routed through its agents into instruments involving firms like BlackRock, Janus Henderson, Anchorage, and Securitize.