Standard Chartered has initiated research coverage on the SKY token of the Sky protocol, formerly known as MakerDAO, with a year-end 2028 price target of $0.325. The forecast represents roughly a fivefold increase from the approximate $0.065 level cited at the time of the report’s release in mid-September 2026.

Geoff Kendrick, the bank’s global head of digital assets research, described Sky as functioning in a manner similar to a federal bank within decentralized finance. The protocol issues stablecoins, maintains a governance framework, and sets wholesale interest rates charged to borrowers across its network of agents.

Core Drivers Behind the Projection

Kendrick identified broader adoption of the USDS stablecoin and rising on-chain borrowing volumes as primary catalysts expected to channel more value to SKY holders. Value accrual is projected to occur mainly through staking rewards, with token buybacks contributing a smaller portion.

Sky ranks as the third-largest stablecoin issuer after Tether and Circle and stands as the largest issuer of yield-bearing stablecoins. Its sUSDS token held approximately $4.5 billion in total value locked and offered a 3.6 percent annual percentage yield at the time of the analysis.

One intermediate pathway outlined in related coverage points to potential levels near $0.08 by the end of 2026 and around $0.18 in 2027 before reaching the longer-term objective. The bank also anticipates the overall stablecoin market could approach $2 trillion by 2028, though the precise share attributable to yield-bearing products remains uncertain.

Protocol Fundamentals and Token Mechanics

Following the rebrand from MakerDAO, SKY operates under updated tokenomics. Former MKR holders converted at a fixed ratio of 1 MKR to 24,000 SKY, and new token emissions have been discontinued. Holders may stake SKY for rewards, exercise governance rights, or use the token as collateral to borrow USDS.

A revised surplus distribution framework allocates portions of protocol revenue toward SKY buybacks that support staking rewards, direct USDS staking incentives, limited buy-and-burn activity, and retention in a surplus buffer. Gross revenue for the second quarter of 2026 registered near $107 million, with reserves continuing to build.

Agent network activity, including platforms such as Spark and Grove, has expanded borrowing capacity and institutional use cases. Protocol surplus generation and consistent USDS growth remain central to the bank’s thesis.

Market Response and Key Risks

Following publication of the research note, the SKY token registered modest gains in spot trading, with 24-hour volume rising and futures open interest increasing. Circulating supply stood near 23.42 billion tokens out of a total supply of approximately 23.46 billion.

Standard Chartered noted that slower-than-expected expansion in yield-bearing stablecoins could delay the pace of returns distributed to token holders. Execution on USDS adoption, agent utilization, and sustained surplus generation will determine how closely outcomes align with the projected trajectory.

The bank’s coverage places Sky among the more closely examined decentralized finance protocols as institutional interest in on-chain lending and stablecoin infrastructure continues to develop.