Sky Protocol’s Flagship Stablecoin $USDS Expands to Solana

Rewards and Incentives for Early Adopters

In order to encourage the adoption of $USDS, Sky Protocol is offering rewards for early adopters and liquidity providers. For example, users of Kamino Finance can earn up to 200,000 USDS weekly for providing liquidity to USDC/USDS pairs, while stablecoin liquidity providers will be eligible for an additional 100,000 USDS weekly.

In addition to Kamino Finance, Sky has partnered with Drift Protocol, Save Finance, and other prominent DeFi projects on Solana, with over 300,000 USDS to be distributed weekly across these platforms.

This strategy mirrors similar initiatives by other stablecoin issuers, such as PayPal’s PYUSD, which also deployed liquidity incentives to foster growth on Solana. However, unlike PayPal’s PYUSD, which has seen liquidity ebb after initial incentives expired, Sky’s long-term success will depend on whether the incentives can sustain consistent engagement within the Solana ecosystem.

Wormhole’s Role in USDS Multichain Expansion

A key feature of $USDS is its multichain functionality, powered by Wormhole’s Native Token Transfer (NTT). This integration enables $USDS to operate seamlessly across both Solana and Ethereum, ensuring a unified supply of the stablecoin across both blockchains without the need for wrapped tokens.

Wormhole’s NTT technology also supports the cross-chain bridge for Sky’s governance token, SKY, facilitating its transfer between Solana and Ethereum. This cross-chain interoperability makes $USDS more accessible to a wider audience, promoting its use across different DeFi ecosystems.

Sky Protocol’s plan to introduce SkyLink, a cross-chain bridge for USDS and its savings version, sUSDS, will reportedly further expand the stablecoin’s usability across various blockchains. 

Sky’s Journey and the DeFi Landscape

Sky’s rebrand and the launch of $USDS come at a time when Solana’s stablecoin market share is still relatively small, with the network holding just 2% of the stablecoin market compared to Ethereum’s 51%, according to DefiLlama.