S&P Global assigned a 'B-' credit rating to Sky Protocol, the decentralized finance protocol formerly known as MakerDAO, according to a report from The Block.

The rating places Sky Protocol deep within S&P's speculative-grade tier — six notches below investment grade — and reflects the agency's concerns over centralization and liquidity in the protocol's operating model.

What risks did S&P flag?

The Block reported that S&P's assessment centered on two principal risk vectors:

• Centralization risk stemming from the concentration of governance power among a relatively small set of token holders and affiliated entities controlling Sky's treasury and protocol parameters.
• Liquidity risk tied to the composition of the protocol's reserves, which include substantial holdings of tokenized real-world assets and short-duration U.S. Treasury instruments used to back the USDS stablecoin.

The 'B-' designation aligns Sky Protocol with S&P's expanding framework for evaluating digital-asset-native entities, a relatively recent extension of the rating agency's traditional coverage of sovereign and corporate issuers.

What does the rating actually mean?

S&P's credit scale runs from 'AAA' (highest credit quality) down through 'D' (default). Investment-grade ratings occupy the 'AAA' to 'BBB-' band, while 'BB+' and below are classified as speculative. A 'B-' sits four notches below the investment-grade threshold, indicating material credit risk and a meaningful probability of default under stressed conditions.

For a DeFi protocol, the rating reflects an assessment of governance resilience, the durability of reserve assets, the protocol's exposure to smart-contract and oracle risk, and the institutional infrastructure underpinning its operations. S&P has been gradually extending its methodology to cover decentralized finance issuers as the sector matures and institutional adoption expands.

Why it matters for the protocol

Sky Protocol operates one of the largest decentralized treasuries in the crypto economy. The protocol transitioned from MakerDAO to the Sky brand in 2024 and now issues USDS — the successor to the long-running DAI stablecoin — alongside the SKY governance token. Reserve management and governance decentralization have long been focal points for regulators, institutional counterparties, and rating analysts evaluating the protocol.

A 'B-' rating functions less as an endorsement and more as a calibrated warning. For institutional allocators weighing exposure to DeFi credit instruments or to USDS as a settlement asset, the assessment crystallizes concerns that until now have appeared chiefly in academic and analyst commentary. For Sky Protocol's stewards, the rating establishes a baseline against which subsequent rating actions will be benchmarked.

S&P did not immediately respond to a request for comment, according to The Block. The rating is likely to be revisited as the protocol's governance framework, reserve composition, and regulatory standing evolve, with any material change to either centralization metrics or liquidity buffers capable of triggering a downgrade or upgrade.