S&P Global has assigned a B- issuer credit rating to Sky Protocol, marking the first rating for a decentralized finance (DeFi) platform from a major credit rating agency. The rating reflects concerns over governance centralization, weak capitalization, and regulatory uncertainty. Sky Protocol, which facilitates cryptocurrency-backed loans, has a market cap of approximately $5.36 billion for its USDS stablecoin. The assessment indicates that while the protocol can meet its financial obligations, it is vulnerable to adverse conditions. S&P highlighted risks such as high depositor concentration and reliance on the founder, with a low risk-adjusted capital ratio of 0.4%. The rating also downgraded the protocol’s anchor rating to ‘bb’, citing regulatory uncertainties in the DeFi space. As the crypto sector increasingly interacts with traditional finance, institutions like S&P Global are assessing more crypto entities for creditworthiness, reflecting the evolving landscape of digital assets.

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