Sky (SKY) Token Autopsy: Who Gets the Yield? | Daily Crypto IQ

0:00MakerDAO rebranded to Sky. If you don't know that, you probably do remember MakerDAO. And let's see, 1.87 billion market cap. Yes, this is the continuation of the yield series that we're doing. So, last week was stablecoin rails. We've done deep dive research shows on stablecoin rails specifically. This was token autopsy wrapped around stablecoin rails. Now, we're doing token

0:32autopsies wrapped around yield bearing assets. And tonight, we're going to do Sky. We did Morpho on Monday. I was out on Tuesday, but we're back at it now. So, max supply 23.4 billion. Smash that like button for me. Make sure you are subscribed. And where's our circulating supply? 23.42 billion. So, very close to max and circulating supply. That is usually a pretty good thing. If we take a look at

0:59this chart here, we will see that it is September 23rd, 2024 token generation event. And it really looks like it's big inverted head and shoulder that's starting to break out. It definitely broke this this high here. Putting in an all-time high at Let's see what it says. 10 cents, pretty much on the dot. And then we have Ethereum contract and hydration,

1:28which I've never heard of. Uh sky.money is the website. Decentralized finance stablecoin issuer governance are the categories. Let's go ahead and start talking about this thing. Who holds some Sky? I actually believe I hold a little bit of Sky. And I believe that there is another coin called Sky as well. So, don't be confused with that. I don't think the other coin called Sky is a a yield

1:56bearing asset. So, Monday we talked about Morfo, right? Helped us supper separate separate separate a useful lending product from the economics of its token. Tonight, follow the yield. Who actually gets paid? Move to Sky, the protocol that outgrew Maker DAO or grew out of Maker DAO, either way. There is a timely reason to look underneath the branding, right? So, on September 23rd, Sky announced that

2:28Galaxy had added 100 million of SUSDS to its balance sheet and accepted SUSDS. I know it's a lot of letters there. So many stable coins are like that as institutional loan collateral. That is an actual use case. The partner logo department finally has something to discuss. But, saving yield or savings yield, borrowing income, and Sky staking rewards are different things. A dollar moving through the system does not visit every holder's

3:02wallet out of courtesy. Tonight, we're explaining the products, trace the income, examine the supply and control infrastructure, and finish with a full scorecard and token autopsy leaderboard so you know where we're at. Let's go ahead and jump into those beautifully handcrafted slides, right? One of 196, so you know we got some stuff to get into. Moses says she does not hold any Sky. All right, the markets are down a little

3:41bit today if you've been living under a rock. So, we'll see how many people actually show up. Some people maybe licking their wounds right now. We've all been there before, so we feel for them. We feel for him. It's one of the beauties of holding long-term a lot of times. Don't have to be so emotional about every little up and down. Anyway, Sky Token autopsy, who actually gets paid?

4:05Follow the yield. Yesterday, Morpheus. Not really yesterday. We were supposed to do this yesterday. But today we will do this. All right, let me get back on gear here. All right, so what I was trying to say is that we went over Morpheus, right? And it helped us separate the useful ending. On September 23rd, Galaxy came in with 100 million of sUSDS.

4:31Added it to their balance sheet as collateral. Oh, wait. Go back. I I want to do the what you may not know. There we go. One of my favorite segments, what you may not know. Everybody wants to know what they may not know, and you can't know something until you know something. It's a heck of a paradigm, right? So USDS does not need to trade at exactly $1. It represents a savings position whose redemption value grows in USDS.

5:02This is very interesting. A higher share price can be normally or normal accrual rather than a broken peg. So right off that, it's kind of telling us this works a little different than what you have may have seen before, and that's why we deep dive these things. So staking Sky is not Ethereum validation. Sky participates in protocol governance and reward mechanism. It is not the gas token securing Ethereum's

5:33consensus because that would be staked ETH. A buyback can become somebody else's reward. Repurchased tokens can distribute to stakers rather than being destroyed. We want to see those tokens get burned, right? Buying, holding, distributing, and burning are not separate events. The mechanism name does not replace its actual accounting. Signal versus noise. Easily my second favorite uh category that we do right in

6:02the beginning of the show. So, signal very important, noise not as important. What is noise? Well, stablecoin adoption is rising, so Sky must rise. That is nonsense. Signal, what is important is that adoption matters when it produces sustainable slurp surplus. I want to say slurpy so bad. Where is that coming from? Probably cuz I live in Florida and it's always hot. Anyways, uh yeah. So, the adoption doesn't really

6:29matter until it's sustainable surplus and a working route to token benefit and hopefully a decent fee capture on whatever ecosystem it's in. Noise. The burn engine buys tokens. Therefore, every purchase token disappears. While some of it could be buybacks that are repurposed as rewards, can be good, but at the same time it's not deflationary. Less important? Well, separate reward

6:57inventory from tokens that are actually burned, right? You should know that now. [music] All right, that's actually signal. That is important. The higher yield is obviously the better product. Not always true. Check the collateral, withdrawal conditions, and losses that can sit behind the extra percentages. That is important. What is noise? It's on chain, so control must be widely distributed, very

7:24decentralized. That's not always true. What is important is that public transaction makes control very visible, transparent. They do not distribute it automatically. There's Struggoheart. I knew he'd be here. I could count on him. Welcome in. Welcome in. Smash that like button. Uh thank you Melissa for that $5 super sticker. I really appreciate it. Keeps me going. Sugar Heart says, "Glad you're feeling

7:52better. Missed you last night." Yeah, that tension headache. I I was saying it before you came in. I had a really bad tension headache. I even sat here and tried to read like five, six uh slides just to see how it go. I had to squint one eye to be able to really read it. It was terrible. I was like, "I hate to do it, but I'm just going to call off and we'll do it the right way tomorrow, which is today." Tomorrow is always

8:16uh today. No, that's not. Sounds like something Kamala Harris would say. Uh sky is the limit. Exactly. All right. So, now we really get into the meat of the matter here, right? The Central Test. The problem? Well, several Sky products create different economic positions. So, consistent branding does not equal consistent exposure. We're going to

8:41break this thing down. The shift. So, we go problem, shift, identity or identify. Sorry. The asset I'm I'm such an uh I'm so worked up. I just ran out of the gym to be here with you guys tonight and uh I'm on one. I'm on some high energy right now. So, I'm trying to read words before I even read them. So, identify the asset held. Return source, conditions for receiving it, and the risk to principal.

9:10The payoff? Evaluate Sky's product and Sky token without assigning everyone the same income or protection. So, you got to kind of know what product you're in and why it matters. Hey, Reliable J in the house. Salute to you. Thank you for being here, Reliable J. We're talking about yield bearing assets once again. So, Sky is a stable coin and capital allocation protocol built on

9:38Ethereum. It's Maker DAO heritage cuz we talked about how this was once Maker DAO. It rebranded the sky. Matters because the infrastructure pre-dates the newer branding. The new package that's shiny wrapped around it, right? It used to be something else. So, it's practical job is to connect dollar-denominated on-chain liquidity with collateralized borrowing and other approved capital

10:06uses. And if that sounds scary, just hang out. It's not as complicated as it may seem. It also provides a savings mechanism. The operating problem is familiar. Capital providers want to want a usable stablecoin asset, right? Or a stable dollar, usable dollar. Borrowers want financing, and the system needs enough income to finance protection to serve both. So, really think about this cuz we've been breaking

10:35this down quite a bit. When it comes to financial products, you kind of have two sides competing with each other. And not so much competing in an unhealthy way, but just competing because they really want different things, right? So, if you're providing capital in one of these financial products, you want to make money. So, you want higher fees, or you just want something that is reasonable.

11:03But, to be competitive in stablecoins a lot of times, you have to have a really low fee. So, that causes some friction. So, you have the capital providers, right? They want to make money. Then you have the borrowers. Well, if I provide capital and nobody wants to borrow it, I'm never going to make any money. So, we have to meet in the middle a little bit, come down on those fees and that interest to get it somewhere where people could reasonably borrow.

11:31And if you're borrowing, you want those fees, whether it's interest or transaction fees or whatever, you want them to be as low as possible. That creates friction because both sides need each other, but they both want the opposite thing from each other. And the system needs enough income, aka fees and things, revenue generation, to financially protect both of the people, the borrowers and the providers. They're the people in the middle. Sky is

12:01the middleman. So, Sky governs that system, Sky token. USDS is the stablecoin used inside of it. Buying the governance token does not create a savings deposit. And if you work with this stuff enough, it is good to kind of know your stablecoins, not because you're going to invest in them necessarily or at all, but because when you see USDS, you know what ecosystem you're dealing with. If

12:28you see USDT, you have a little bit of an inclination to what systems you're working with, and that can be highly important from making silly mistakes. A protocol can be useful to someone who never wants to speculate on its token. That is a feature of the product, not a missing marketing opportunity. And this goes back to a very I got to keep saying this, guys. I got to keep kind of screaming it from the roost the rooftops here.

12:56Is every token is not promised to be a pumping token. They're just not. You have governance tokens, you know? They're not really made to pump. They may go up. People may buy them. People may speculate. People, big players, might buy a lot of it because they want governance, voting right and ability at a high level, so they buy a lot of it, right? If it works that way in that ecosystem.

13:25But, nobody promised you that Sky was just going to go to the moon. So, if you're holding certain tokens, that's the whole point of this token autopsy. We want to know, is there connection between the ecosystem and utility for the token that makes sense? Or are you buying a token because you think a product is good and there's no connection there? I trust me, guys. I've been in in crypto long enough that I I've made all those

13:50mistakes. If you can avoid some of that, you'll be much, much happier. >> [music] >> And maybe you won't be one of those people on the internet who got hurt and is just trying to uh put down crypto just because they didn't know what they were doing. They didn't raise their crypto IQ, and therefore they got hurt. You go into anywhere, any market, and you don't know what you're doing, and you just start throwing money

14:11around, you're probably going to get taken advantage of. USDC I want to say USDC so bad. USDS and its backing, right? Let's talk about it. So, USDS is designed to remain close to one US dollar. The protocol also supports legacy DAI, D A I, with a one-to-one DAI USDC USDS got I'm going to get that right conversion route. I feel like I say USDC so automatically. Anyways, this changes the tokens representation. It

14:43does not multiply the dollars actually owned. The backing is a mix of protocol collateral, approved capital deployment, rather than a promise that every dollar is sitting as idle cash. Over collateralization means collateral value exceeds the associated debt. It provides a cushion. And I'm really I'm really trying to wrap my head a lot around things like

15:13Bitcoin backed mortgages, just talking about financial stuff. Like, let's say you have so many Bitcoin, but your collateral is in US dollar value of that Bitcoin. So you have a $100,000 loan or $400,000 loan. Say you got a little nice change and you got a house. That makes more sense. But then the next thing you know, we go into a bear market 9, 10, 11, 12 months later, your once $400,000 worth of Bitcoin collateralizing your loan, and I'm not a

15:42mortgage lender, so [music] I don't exactly know how that works, is now worth like 150 grand. Now you're a huge amount of money in the hole. How does that work? I've been digging into that more because it seems to me like they would just liquidate you and take your money. That doesn't sound good. And then what what happens to the house that you live in? Foreclosure?

16:04I I don't really understand how that's going to be good. Unless you have way more money than you need and you can add more. Anyways, I'm getting off topic. That happens sometimes. What's up, Campster? Welcome in. We consolidating to 65k or what? Who knows? It's all up in the air. We'll see. Uh what's the price of Bitcoin right now? Are we above 83,500 or are we lower than that? I looked

16:30earlier today, but you know, Bitcoin, it can move so fast. Who knows what it is uh right this second. I'm focused on this yield-bearing asset and these token autopsies right now. But I'd look at it after the stream either way. All right, let's get back on track. Right. So over-collateralization means more money than than you are in debt. So if I owe, and I guess it could happen pretty easily in a bull market,

16:57kind of the reverse of what I was just talking about, is kind of how I got on that topic of Bitcoin mortgages. And so then what does it matter when you're under-collateralized? I think it's funny that you can get liquidated, but there's no like bonus if you're over-collateralized to my understanding. [music] So the cushion's usefulness depends on the asset quality, valuations, and how quickly assets can be sold or recovered. Collateral worth a

17:26dollar on a dashboard is not necessarily a dollar available for redemption this afternoon. So, there's some intricacy here that you have to understand. USDS also depends on peg support liquidity and counterparties elsewhere in its structure. Decentralized, the term is not a useful substitute for reading the dependency list. So, then we have this USDS S U S S S U S D S. There are too many S's in that. All right. Same share count this

18:04stablecoin shares stay in a wallet, right? So, you get like a share of the stablecoin. More redeemable USDS value per share can accrue over time. From what I'm gathering so far, this works a little differently than what you may be used to in a direct just one-to-one peg to a dollar when you hold some USDS. So, supply USDS is the saving module and receive S USDS S U S U S D S. Wow, that is really fun to say a lot of times. You should try it at

18:41home. It's an exercise. Call it homework for the undergrounders. Anyways, a transferable vault share token. Each share represents a redeemable quantity of USDS. As the saving rate accrues, grows, the USDS value of a share actually increases. The wallet share count can remain unchanged while the position still earns. >> All right, we should be back. I I don't know. I I don't know.

20:42Hit that coffee. I did literally just reset this microphone before we started. All right, we good? Can hear music though. Yeah, it's just the microphone. I I don't Like I said, I just reset the microphone to avoid these things a lot of times right before the stream, and it still does wacky stuff. I don't know. I don't even think I was touching the microphone cord. Sometimes I think it's because I

21:14touched the cord. I don't even think that's what it was. All right, good. Everybody can hear me. Good stuff. So, APY annualizes a yield using compounding assumption. It does not promise the same rate for the next 12 months. There is no contractual maturity or staking lockup in the basic saving portion. So, this sUSDs saving sounds pretty good. Exiting to USDs. So, I guess the S in front of all of

21:47this is for savings, not staking. Interesting. A different way to do it. So, exiting the USDs and converting onward to another asset remains separate steps with different practical conditions. A savings rece is not Sky, and a rate displayed beside sUSDs is not the yield earned by someone simply holding Sky token. There is some intricacies here, right? And I know that a lot of people This is

22:20a really good point in this for me to say this. A lot of people see a lot of this financial stuff, and they just kind of tune out. They don't have the faith that they could begin to understand. Start small. Try to grasp a thing or two. But, what what I'm really trying to say is that for most of the time in the world [music] in our history as humans, literacy was the big problem. People couldn't read and write. That really stunted their ability to understand and

22:44grow in information. Now, you fast forward all the way now, we're like, information is just thrown at you even if you didn't ask for it 24/7. The next big hurdle for everybody is financial literacy, the ability to understand financial literacy. So, I feel like crypto might play a huge role in people beginning to really understand financial terms and stuff like that. It's very interesting if you ask me. What's up, CCP?

23:19Love you, too, CCP. Welcome in. Welcome in. Our comedic relief is here from all this intense yield financial talk. So, where income originates, where is the money coming from and who gets paid? We'll get to the who gets paid part in a minute. Smash that like button for me if you're just coming in. And uh make sure you're subscribed, right? How many people are coming and they're not subscribed? So, Sky's revenue

23:45sources include collateralized borrowing, capital access through its agent network, treasury-related strategies and lending market activity. So, that's three different ways income's coming in. These are different economic engines, though. Borrowing income compensation for access to capital, aka when you have a loan and you pay interest.

24:12Treasury-related income, returns associated with short-duration government debt exposure. Sounds fancy. Subject to the actual investment structure. The lending market income, returns influenced by borrower demand and capital utilization. So, that stuff probably fluctuates quite often. The relevant test here is what remains after funding costs, operations, and losses. So, like when you pay everybody and you pay all the expenses in a

24:44digital sense, right? The room in which you run your business has to be paid for. What's left over is actual revenue. So, the a treasury strategy carries different risks from a loan against a volatile crypto asset. Putting both under real yield does not make them interchangeable. Again, a treasury strategy carries different risk from a loan against a volatile crypto

25:15asset. Putting both under real yield does not make them the same thing or interchangeable. I had to read that twice because I want to make sure everybody really got that. I know there's a couple of you who are locked in here like I am. So, our interpretation Diversified income sources can improve resilience, but only when their exposures are meaningfully different. Six positions relying on the same

25:42liquidity event are one dependency wearing six name badges. So, the liquidity what it's all connected to is usually where your risk comes in. The agent network. This sounded pretty cool, right? So, you have Sky Capital Access. You have Spark lending and liquidity. I maybe I think I own some Spark. That's what it is. I own a little bit of Spark. And then you have the Grove, which is institutional

26:08credit. Independent agents use capital under protocol limits. Income follows their arrangement. Then we're talking about the agent network, right? So, agents are independent participants that access or allocate US DS under protocol risk frameworks. They are not all subsidiaries controlled by one Sky company. Two examples make the roles concrete. So, Spark Spark token, right? Spark supplies

26:43lending and liquidity infrastructure. It's capital allocation activities connect stable stablecoin liquidity with approved markets and applications. Grove, the institutional side of things, focuses on institutional credit and capital deployment. In the Galaxy relationship, its warehouse facility provides financing for Galaxy's origination of institutional loans. We just heard that they put what, 100 million of that USDS

27:14in their balance sheets. A warehouse facility funds an inventory of loans. It is not a building full of stable coins. That's pretty funny. So, an agent own an agent's own token has its own economics. Owning Sky does not automatically mean you're owning Spark or Grove or every fee generated by those businesses. So, we're saying that if I'm getting this correct, SPK or Spark is a agent itself and Grove, the

27:51financial side, is an agent itself. And they just want you to realize that owning Sky is not giving you some kind of ownership of either of those. The analysis follows what reaches Sky under its arrangement and what Sky does with that income. And at the end of this, we're going to find out if Sky token is really worth holding. If you're trying to make money, I guess.

28:17So, USDS suppliers provide lendable capital. STUSDS pool earns based on utilization, right? A pool needs to be used to make money usually. And Sky borrowers borrow USDS against staked Sky. Collateral losses and withdrawal liquidity are separate risks from the SUSDS. ST USDS

28:48It's just getting longer and longer and longer. Is a separate position supplying U S D S the stable coin to support borrowing against staked Sky tokens. It is a risk capital product, not another spelling of a basic savings token. Its return depends on utilization, the share of supplied capital actually borrowed. And again, I like this middle one here. Let's read it again see if you

29:19guys get it. It is a risk capital product. This S T U S D S. It is different than the basic saving token S U S D S. Unused capital can accrue or build up the saving rate. Utilized capital earned through ste- It's not stake. Earned through Sky back borrowing mechanism. The additional exposure is specific. If

29:50Sky collateral falls sharply and liquidation cannot recover the debt, the pool can face losses. And that is how the pool loses. Withdrawals also depend on unused liquidity being available. The module is designed to isolate the lending risk from the S U S D S. Isolation contains an exposure. It does not erase it, right? I'm trying to limit exposure to the to

30:21the savings of [music] the S U S D S, right? A higher yield here needs to compensate for a different job and a different loss scenario. The extra letter is small. The extra homework is not. It's pretty funny. So, the staking engine lets a holder use Sky token for a reward position, governance delegation and optional USDS borrowing. So, we went through some of the intricate stuff

30:50here. All right, so if you were like, "Whoa, I just zoned out for a good 10 minutes." It's all right. Now, we're going to reel it back in and we're going to talk about Sky, the token Sky, and its utility. What is it? What does it actually do? So, we have governance and optional USDS borrowing. And of course, Sky for a reward position in the staking engine.

31:16These functions can be managed separately. The demand case has three different components. You have governance demand, economic participation, and collateral use. In governance, people want influence over the saving rates, collateral rules, capital allocation, and upgrades. Economics, active stakers seek the available rewards. So, that one's simple. You stake, you get the reward. Collateral

31:43use is some holders want liquidity without immediately selling their Sky so that they can put that Sky up as collateral. And get a portion probably of the interest paid. So, the third component can make the token more useful while also introducing leverage risk. Staking is optional, borrowing is also optional. A holder does not need to borrow merely to access staking rewards. Sky's utility is stronger than a decorative governance

32:15checkbox. So, it has more to it than simply governance. That should be the big takeaway. The next step is establishing whether its benefits remain attractive after price volatility, policy changes, and financial risk. >> [music] >> Adoption and scale. So, now we start getting into our different categories. Use a dated checkpoint for scale comparison. So, the quarter two report recorded 12.3 billion in protocol

32:42collateral and 5.5 billion in the U in the SUSDs at June 30th. These are historical balances, not October live totals. We're just doing like a little snapshot here so that we can work with some numbers. Collateral measures assets and positions supporting the the protocol. It is not immediately distributable cash. And again, we're talking about adoption of the product and the scaling of the product. So,

33:11SUSDs supply measures the savings token position under reported scope. It is not the same thing as total stablecoin supply. Stablecoin supply measures outstanding units. Total value locked measures assets committed to a defined product or a set of contracts. Their scopes can overlap. Adding them can count the same economic position twice.

33:51The official Sky ecosystem and sky.money live balance widgets did not reconcile in this in this research snapshot, right? They are not being presented as verified current balance sheets. Galaxies SUSDs is a evidence that the savings receipt can serve a treasury and financing purposes beyond a specialist DeFi interface. The adoption case is very credible. Obviously, there's a lot of things that you can do with this

34:27Skype ecosystem. Its durability still depends on competitive returns, redemption confidence and customer staying through less generous conditions. So, when things are not amazing, do people still want to stay? So, here we are quarter one gross and surplus. Same thing quarter two. You had more surplus in quarter one of 2026. Sky's Frontier Foundation complete

34:56quarter reports provide a useful comparison. Gross protocol revenue measures reported income before the reports expenses. Net protocol surplus measures the amount remaining under that reported framework. It is not identical to the amount distributed to Sky holders. Reported complete quarters in US D millions, right? These are foundation reported protocols, yep. Gross revenue and surplus are nested measures. Do not

35:30add the bars together. Surplus is not the amount paid to Sky holders. That's the biggest takeaway there. Is the surplus is not just handed over to the people that are holding Sky. In both reports, measures were lower in quarter two than quarter one. While surplus remained positive, the lesson is not that a softer quarter invalidates the protocol. It is that growth narratives need a cost and margin explanation.

36:00Savings payments are a funding cost to the protocol and income to the savers. The same payment cannot be counted again as money available for token rewards. Like the money can't be spent multiple times. Also, separate reported income from cash settlements. And earned or accrued amount and cash already collected can arrive at different times. So, follow the allocation here. Stage two reserve building September 17th,

36:302026 after security plus maintenance deductions. Reserves is this purple Sky rewards, USDS rewards and a buy and burn is only 5%. Sky stakers select one reward channel. I get it. I get it. So, you you can't be in all of them. You got to be in one of them. Don't forget me getting started again boy, it's hilarious. Sugarheart great to see you. Get started blue sky, he says. You guys

37:03are killing it in the chat. Thank you everybody for being here. I know this stuff is heavy. But, I have to learn it regardless. So, you're you're going along with me, right? So, the reported stage two reserve building configuration divides eligible surplus into four destinations. You have a reserve, you have Sky rewards for Sky stakers, USDS rewards for Sky stakers, and Sky token buy and burn allocation.

37:33And I'm glad that we have a burn in there and not just a buy. The basis matters. These are allocations after the relevant security and maintenance deductions, after expenses, not percentages of gross customer income. BA Labs, which must be what's behind Sky. I haven't heard of this BA Labs yet. August configuration subsequently executed through governance demonstrates that sequence. Reported stage two

38:00reserve building configuration describes September 17th, 2026. Surplus after the relevant security and maintenance deduction, not gross revenue. We were just recapping there. We probably could have done without that part. Uh Campster says, "Why do you have to learn this UG? Like how is this going to be useful to you? Well, for one I'm always trying to educate myself in anything related to crypto. So, there's

38:30that. And decentralized finance is kind of the core of what crypto is at before you can get into all these other things, right? And so, if I have money and I want to put the best strategies, just like it just take out the whole decentralized finance. If you have money in your bank account and you want to go into like the rich people do and move your money around and make it

38:58make money for you and put it in places, you need to know how the systems work. This stuff that we're talking about now is how almost everything's going to be in the future as everything gets tokenized, right? But you have to understand where the risk is versus the reward and how the systems work. Otherwise, you can't do it. And if you wait until you have all of this money that you want to throw at something, you're not going to have the diligence

39:26and the patience to learn what you need to learn before you go throw money around. I would rather learn it now when I'm not necessarily looking to buy or to put my large amount of money in anything, so that when I get to that step, I know what I'm doing. Also, as I do different token autopsies of different things like we did Morpheus earlier, I also want to know how they how the different ones operate and who I like better as far as the strategies,

39:56financial strategies that I put together for myself and my life, right? Financial strategies is a term most people don't know because they don't have any financial strategies for their life. This is just helping me learn one as an educator and somebody who talks to other people online about crypto and stuff. I'd I'd to be able to answer at least basic questions well. And then also for my own personal life and finances, I'd like to understand

40:23where the snakes are in the grass and who's got better systems than other, where is there more reward, where is there more risk. And that's how it's going to help me. Now, for most people they just look at it and they're like, "That sounds like effort. I don't want to do that." Hey, and everybody has their own decision, but for me I I I want to I want to be one of the

40:46most educated people in the space and it starts with daily learning. It's like going to school. Now, a lot of stuff that we go over is not this complex. I get it. I kind of set myself up when I did a yield bearing series. So, hang in there. We'll do something a little bit funner next week. Mhm. Speaking of that, I actually um I actually had a really good idea for next week's token autopsies. I want to

41:16pick some people who are always here and I want to let them tell me what token they want me to go over. You only get to pick one, right? So, we have four token autopsies in a week. So, that's four people who are going to give me a token and that's what we're going to go over. So, the first person here is Melissa. Melissa, give me the token you want me to go over the

41:46most. You've mentioned a few of them to me. But, as it stands right now, let me know what token you And I need everybody's answer by like Friday night, Saturday, right? Otherwise, I'm just going to pick something else, right? I'll pick somebody else if you don't give me an answer. >> [music] >> So, I'm thinking This is a little difficult cuz I can

42:08only pick four. Uh struggleheart, you've been here really consistently. So, struggleheart, you give me a token you want me to go over. Blues Guy says, "UG, I think you are." Maybe, I don't know yet. Could be. Pick Struggahart, he loves tacos. There you go. So, Melissa, give me a token that you want me to go to deep dive next week, token autopsy, right? We're going to do the same format.

42:35Struggahart, give me a token. That's two people. And let's see who else do we got? Reliable J, Reliable J, and Blues Guy. I know I I think I know what Blues Guy is going to pick. So, those are my four people. If you didn't get picked, we'll do this again sometime, right? And I just want to kind of come off of this intense financial DeFi financial like series here about

43:02yield with maybe a fun week of token autopsies that are centered around stuff people want. CPP Are you trying to defer? Blues Guy, are you trying to defer it to to somebody else? Anyways, let's I'm going to get back into this. Cuz believe it or not, I find this highly interesting. You might not. You might

43:29not. August A U A G U 3000 says, "Nice." Love that. Reliable J, what's up, my man? So, everybody give me one thing that you want. Yeah, A G U 3000, I definitely recognize your name. I've seen you here many times. Says, "OG here." Thanks for Thanks for throwing something in the chat, let me know that you're here.

43:57What do you think, 3000, of this [music] uh yield-bearing series here? Is it a lot? Is this something you know something about? Are you learning? If you come and you learn even a couple of small things, that's a win to me cuz those compound over and over. Anyways, I'mma let everybody get their stuff together. So, you want me to go over optimism? Is that what you're saying Struggahart? You want optimism? Everybody, I'm going to

44:24re-ask you at the end. You got a little bit of time to think about it and lock in to what you want me to go over for you. Now, follow the allocation, right? Both reward channels serve Sky tokens stakers and participants select the channel rather than automatically receiving both. This is a dated policy configuration. Not measured cash payouts or a guarantee of future allocation. Two

44:50reward currencies do not give each staker an automatic claim to both pools. The selected reward channel and its participating stake affect the position's return. This sounds actually highly complicated because you got to choose what you want. Uh Campster says, do you make good yields by staking your crypto? Reliable J, I have not done VVV yet. That would be a good one. I know somebody who who would really like me to do that one as

45:22well. I think I made like a hundred bucks by staking SOL for three years. Yeah, it depends on what you stake. If you would have staked Atom, you get like anywhere from 12 to 16%. You would have made a lot more. Uh but Weeks gives me better yield, so I moved some spot over there. I mean, earning 5 6 7 8% is better than earning 0%, would you not agree? Hey, uh I'm just going to call you Mr.

45:503000, right? Learning is great. DeFi is a big space in crypto. Exactly. And you kind of have to day-by-day attack and chip off little pieces of it before you can really start to build something big as far as an understanding. Harder to access, so it's a big bit of a trade-off. Yes, all of that is true. Like all of that is absolutely true. It says I use DeFi. I'm glad to hear that. I mean, I don't use as much of

46:22like borrowing and lending protocols as I know some people do. That's not really my jazz, but um I do of course stake here, add the pools there, and do things like that in different places. At this point kind of a bunch of different places. Uh Blues Guy says, "Can't network." All right, I'm going to ask everybody to solidify their answer later on. I'm glad to see you in the chat 3000. I appreciate that.

46:53We'll do the uh the undergrounders like picks for Token Autopsies. Maybe we'll do like two [music] back-to-back weeks. I'll pick four more people the week after. But we'll be talking about it. You got to show up if you want that slot and to choose one of the coins we go over. So, the selective reward channel and its participating stake affect the position's return. The published allocation is a dated configuration, not

47:21a permanent dividend contract. Reserve requirements and governance can change what reaches downstream recipients. Unlike a token whose capture mechanism remains hypothetical, Sky Token has an implemented economic route that earns points. It does not excuse us from checking what the routes are. So, we have buybacks and burns. This is one of my favorite mechanisms you could possibly have in a token, but a lot of times we find,

47:53although a protocol or ecosystem has buyback and burn that they're not really that amazing cuz there's not that much being burned. So, each token has to be scrutinized [music] individually. You have retention. Inventory remains protocol controlled. Distribution [music] purchase Sky tokens can reward the stakers. And burn, of course, our tokens

48:18permanently leaving the supply. A buyback purchases Sky from somebody willing to sell it. What happens next determines the supply effect. Now, a buyback is almost always them buying out of the open market. That's why they're saying somebody willing to sell. Reward distribution returns tokens to participating holders. Those holders may retain them, restake them, or sell them. Another good reason why it's to know all this stuff is because

48:49you're constantly seeing new products. How do you know if those products are better than ones that we already have? How do you know if they set it up in a way where they're going to just basically take your money if you don't understand it? Everything good is God. Jesus is king, and you are awesome. Amen to that. Amen to that, Blues Guy. So, treasury retention moves tokens into protocol controlled inventory. That can reduce

49:20immediate tradeable supply without permanently destroying it. So, this is when treasury moves tokens into protocol controlled inventories, right, accounts. Burning permanently removes tokens from supply. The September settlement executive included a burn from the protocol's paused proxy balance. All that you really need to know here is it included some burn from

49:50the protocol alongside reward and buyback updates, the current mechanism should be checked through the executive record, not inferred from the words of something like a smart burn engine. A non-staking holder, meaning you hold Sky but you don't stake it, can benefit indirectly from purchase demand or permanent supply reduction because of the way the tokenomics work. But does not automatically receive staker distribution because they're not

50:19stake. You're not going to get staker rewards if you don't stake. But if the supply is burned and it becomes deflationary, you could benefit in that manner. But we need to know how much is really being burned here. So, our interpretation, buybacks provide a meaningful link to economics. Their price effect depends on scale, valuation, available sellers, and subsequent distribution. The market is allowed to remain unimpressed. It's a

50:48good way to put it. So, the current sky.money token guide states that 23.46 billion Let's just say 23 billion Sky is the maximum supply with new emissions beyond the cap permanently disabled. Reward funding uses existing tokens and repurchases rather than printing a fresh reward supply. I like that. Because a lot of products just meant more tokens. And then they give those tokens. But that is like a

51:22form of subsidy, right? They're creating value out of nothing cuz they're just making more tokens. Where if money comes in, they purchase the money from the revenue, real tokens off the market. That's great for economics. And then they take those ones that are bought back and they rather give them back out as rewards to like stakers, people who are participating in the ecosystem and or burning some of them.

51:50That is good economics if you ask me. I'm really interested to see what Sky is going to score here. Uh the original upgrade demonstration was 24,000 Sky per Maker. Cuz Maker DAO, if yeah, if I remember, it's coming back to me. Maker DAO uh per token was was rather pricey. It wasn't like under a dollar or anything like that. I think it was up there. I think it was 50, 60, $100. Could be wrong on that. I didn't

52:24really own any Maker DAO. But anyways, you got 24,000 [music] Sky tokens per one one Maker that you held. Hitting buttons. So smaller units do not make the underlying protocol 24,000 times larger. No, they do not. Tokenomics matter. Uh honestly, how many tokens are minted and things like that don't really matter, right? If $1 will buy you a million tokens on one project, say the projects are completely identical in

52:55tokenomics, and $1 will buy you two tokens in an identical project, you have the same amount of value. Anyway, smaller units do not make the underlying protocol that much more larger. In the September executive, raised the delayed Maker conversion penalty to 5%. So I guess if you waited, they they hit you a little bit, 5%. That reduces the Sky token received by converting legacy holder. It is not an

53:29annual fee charged to every Sky wallet. Distinguish three supply events. So you have conversion changes, that representation of legacy holding. This is all about what happened when Maker rebranded and changed to Sky. Distribution moves existing inventory into users' hands and a burn reduces outstanding supply. A capped supply can still have selling pressure. Tokens do not need to be newly minted to arrive at an exchange.

54:01Ownership and float, right? Sky inherit a mature ownership history from Maker DAO. A modern-looking token page does not reset that history into a clean new launch pie chart. A useful control map separates individual holders, protocol inventory, staking contracts, and exchanges, and institutions. A large contract balance may represent many beneficiaries. Several ordinary wallets may represent one. Stablecoin Development Corporation, SDEV,

54:37SDEV, is a corporate Sky holder. In October 2nd disclosure, reported approximately 10% of total Sky held by the company. So, why are we laying this out? Well, because this SDEV is holding about 10% of the supply of Sky. Which means if they decided they were going bankrupt, they were going to sell it all, that could be a problem. But only to the tune of about 10%.

55:04So, that is evidence of substantial identifiable holder, not proof that independently controls governance, right? We're not saying because they own 10% that they have all the say in the governance, right? I think you'd need substantially more of it to have full control over governance, right? Effective float means the supply practically available to trade. Reported circulating supply is a broader accounting measure, and it can be

55:30different depending on if you go to CoinGecko, CoinMarket, all of that, CryptoRank, you might get different numbers. Voluntary staking can reduce immediate sellable balance because it's locked up, but current staking itself has no lockup. It should not be treated as permanently removed from the supply, either. That's just basic, you know, tokenomic type stuff. Concentration matters for both market liquidity and

55:57for the votes controlling future economics. Governance and control. So, delegating voting powers. And this is something you see a lot. I haven't got into this yet, so I'm not exactly sure how this works for Sky, but you have a lot of problems around governance in general. Decentralized governance sounds great. It really has to get hashed out. Different protocols and projects try to do it what they think is the best,

56:28right? And because of that, we get the constant evolving and integration of what is best decentralized governance. Some, you just buy coins and whoever holds whatever coins get that amount of votes. Other ones, you get one vote regardless of how many coins you hold. And other ones expect you to delegate your voting power to these different parties, almost like political parties,

56:58right? You donate it to them and those representatives vote kind of for you and their vote matters based off of how many people delegated to them. It is an interesting exercise in decentralized governance, I'll tell you that. The reason why delegating your vote to other people became an idea that became popular was because of how much people didn't participate on the individual

57:28level in governance like they're supposed to, which is crazy cuz it really reminds me, cuz I live in America, how much our stuff was supposed to be set up where the everyday individual person and I'm not talking about if the vote counts or is legitimate or like is messed with. I'm not talking about that. I'm just saying they were supposed to be involved in things so that they could vote on them and one vote for one

57:52person. Well, what happens when everybody tunes out? It's almost like we saw that exact same problem in decentralized governance. There's so many intricacies and so much stuff going on that a lot of people just don't have the time and energy to be a part of a governance or they just don't have enough stake in it. Like they own $100 of Sky token. They don't really care to be constantly updated on governance so

58:18that they came up with delegates. Kind of the same way we have delegates in many governances around the world. Anyway, it's very interesting if you care about stuff like that. So, the top two have 64.4%. Wow. Six largest almost 100%. So, the the top two are inside the top six. Obviously, these percentages are not added. Delegated votes do not equal beneficial ownership of all [music] Sky token.

59:01Chris Goss in the house 333. Welcome in. So, Maker founding history includes Rune Christiansen. I don't know who that is. Uh but that was the Maker founding history. Okay, has this person. So, today's operating structure includes independent contributors, agents, foundation, and token governance rather than one conversational operating company. Governance can change risk parameters.

59:31Governance can change a lot of things inside any protocol. Savings policy, collateral permission, and protocol upgrades. And again, this type of information about governance usually applies to more than just Sky. A spell is an executable package of approved changes, not a wizard employed by the company. By the treasury. Delegation transfers voting authority,

59:59not custody of the delegator's tokens. So, if you have tokens, you can transfer your voting to a delegator, but you're not giving them your tokens. So, the S devs, that was the company that owned 10%. October 2nd disclosure reported that the six largest ranked delegates held 97.4% of delegated voting power. So, almost all voting power is within these six delegates, with the largest two holding 64.4%.

1:00:28These are shares of delegated vote, not shares of Sky ownership. Public governance is inspectable, but practical voting influence is highly concentrated, it seems. So, ASSIS ASSIS I think that might be a typo. Uh delegation patterns and the ability to change decision rather than counting on form accounts. All right, let's get into the competitive moat. This is how Sky stacks

1:00:59up against its competitors. Now, Sky has a lot going on in its ecosystem. Kind of makes me think that it might be difficult for somebody to really copy exactly what they're doing, but who knows. So, Sky's strongest defenses are accumulated operating history, usable stablecoin liquidity integrations, and network that connects capital with financing demand. The other thing is if you are somebody and you were like, I'm going to compete

1:01:27with Sky by copying exactly what they do, well, then what is the point of you? What was the point of even doing that, right? So, its competition exists at several different layers. Other stable coins compete Other stable coins compete for balances and payment uses. Lending and saving products compete for capital. Institutional credit platforms compete for allocators and borrowers. Other governance tokens compete for

1:01:57investors attention and capital. This is the type of thing where I'm talking about raising your crypto IQ. Just understanding what equals what and who it pertains to. So, again, lending and saving products, they compete for capital amongst each other. Institutional credit platforms compete for allocation and borrowers. >> [music]

1:02:20>> Other governance tokens compete for investors attention and capital. The code can be copied more easily than trusted distribution and funding relationships. That does not make a customer's deposit immovable. If the saving rate becomes less attractive, capital can and most likely will leave if it goes on long enough. If incentives temporarily lift returns, distinguish promotional deposits from durable adoption. Okay, so if if

1:02:53incentives temporarily lift returns, right? [music] Meaning there's less incentive, so you're not getting as much return. Distinguish promotional deposits from durable adoption. So, the difference between people who are there because there's a high reward and people who maybe are a little more educated and they believe in the product and they're there kind of more long-term. So, a moat should survive less generous conditions.

1:03:18Otherwise, it's a coupon with architectural ambitions. We talk about rewards a lot in that manner where it's like you could build whatever. And it could be absolute garbage. But if you have, for whatever reason, enough money to throw at people, people will show up. And you probably, if you're in that situation and your hot garbage product is giving away a lot of value, aka money, in some form or another, value,

1:03:50then people are going to show up and they're going to take your money. Just like if you're a coffee shop and you give away free coffee. Even if your coffee's terrible, there will be certain amount of people who show up all the time to drink your free coffee. The problem is when you decide it's no longer free. You now need to pay for it. People are going to be like, "Not paying for this coffee. This coffee

1:04:09is garbage. I'm going to If I'm going to If I'm going to I'm going to pay for coffee, I'm going to go to a place where I like the coffee." And that's why you see them offer a lot of rewards. Then they use the metrics of people who showed up for free stuff. And they try to use that to make it seem like they've done something amazing. But just know the minute they turn off the rewards from a lot of projects, everybody's gone. It's a ghost town and

1:04:37the thing folds up. We're seeing a lot of different protocols like Blast and things [music] like that just they're done. They probably had rewards and things in the beginning and when those rewards dry, nobody wanted to use it. Was there a reason? Were they better than their competitors? I'm going to end my rant there. But understanding incentive and rewards inside launches and ecosystems and stuff cannot really be underrated. If you're a speculator,

1:05:04aka investor, in this type of asset class, of course, this is never financial advice. Food for thought, raise your crypto IQ. So, security and upgrades. We're just going to talk a little bit about security cuz with so much finance and so much money running around, security is highly important. How are they securing these positions? And then, upgrades. What system do the upgrades go through and how do we make

1:05:30sure these upgrades are good before they're implemented? So, the developer portal lists independent audits across core accounting, saving, staking, allocation, bridges, and reward modules. This provides credible review evidence. This does not establish that every possible loss is covered. So, you have three separate security layers. You have a contract risk, which are bugs and upgrades and interactions between modules, right?

1:06:00More at the coding level, smart contract. Then, you have the actual economic risk, which is bad collateral, faulty valuations like uh data feeds from oracles or wherever you're getting your data from, stressed liquidations, and insufficient financial buffers. Then, you have control risk from governance concentration. Governance gets out of hand, too many people are uh concentrated, they have too much say, they do what they want, doesn't matter

1:06:27what everybody else wants, they could ruin a good thing. So, authorized operators and dependency off-chain institutions. So, you have Blues Guy says, "Thank you for the stream, so much information, gratitude." You're absolutely welcome, and that goes for everybody. I love this stuff. I know. Does that make me a nerd? Maybe. I've never been called a nerd in my life, but whatever. I would take it.

1:06:55But, I really love all of this new emerging applications for decentralized blockchain technology. That probably sounded very nerdy. So, USDS and SUSDS include upgradeable contract design. Just going to take a a second here and pause on this and explain. You have immutable smart contracts, right? And what does immutable mean? It means it can't be changed. So, a lot of projects, a lot a lot of

1:07:26projects have these immutable contracts, right? And when they add more things and stuff, they like add more contracts, but they don't go into the original contracts and change them. With an upgradeable contract, that means the ability to access the contract through authorization keys, right? is there and it can be upgraded and changed. So, the risks that come in with these

1:07:55things are a problem and we've seen even exploits and stuff where they got authorization keys so that they could go into the upgradeable contracts and they changed them. We've seen some of that stuff. Now, it's a little different for every protocol as to [music] if a contract gets upgraded, some of them can go live very quickly. Some of them have security features where, you know, 7 days has to go by first and so it gives time for somebody

1:08:21to catch it. Decentralized governance and immutable code are different claims. The protocol also uses governance delays, kind of what I was talking about, and bonded mechanisms that permit certain faster actions. A delay is one defense, not a rule that every possible action always waits. Our interpretation here is that mature technical infrastructure supports confidence while the broader capital structure retains substantial trust

1:08:52assumptions. Uh peg and exit routes. So, the peg stability module, which has to do with the USDS stablecoin, provides a protocol route between USDS and external stable coins such as USDC because you're exchanging one for the other maybe swapping. They've got to be close to each other, right? So that the customer doesn't feel like they lost something from switching from USDS to

1:09:21another stable coin. Now, that conversion mechanism helps arbitrage pull USDS towards its target. Arbitrage means exploiting the different prices. Got a lot of people out there with the arbitrage bots and stuff like that. So, how do you turn that into somewhat of a positive? They're telling you right now. A practical conversion route can give traders an incentive to close a discount or premium. So, when it leans one way, people take advantage of it, that brings

1:09:56it back over here, and when it leans too far that way, people take advantage of it. MEV, maximal extractable value, right? And that that that balance of that is constantly pulling it towards the middle, which would be a perfect dollar. That's very interesting. Um and sounds like a very sound way almost to use the incentive of people who are there to exploit the differences, arbitrage,

1:10:26um to your benefit because you can count that they're going to be there. And a lot of them have bots and stuff. They're not doing it themselves, anyways. It reminds me of um I had some weird things going on with one of my accounts where they were like locking me out of stuff in exchange. And luckily, I knew somebody who knows the owner of the exchange, so I had him reach out. And they they were like, "Oh, yeah, that account we put restrictions

1:10:51on it because they were doing arbitrage using XRP and like stable coin like USDT. But I wasn't. I was just buying on my on-ramp, which is Coinbase. I was buying XRP and sending it to the exchange because I don't pay any fees. So like I There must have been some arbitrage there I wasn't aware of. It couldn't have been more than like a couple of cents. I wasn't sending that much money. You know, what I make like 4

1:11:19cents or something? I didn't even notice. Anyways, um it That was just a a funny story of how like I would got like accused of arbitrage when I wasn't. And the person who was my friend who was like knew the person He's like, "You're not actually doing arbitrage type attacks, right?" I'm like, "No, bro. Not at all." People don't do that themselves. They use bots to do that. And you need large

1:11:43amount of money. You got to think if you're getting like 0.001% difference between the price, like you need millions of dollars to turn a profit on that kind of thing. Anyways, super side salad. Thank you everybody for being here. Hit that like button. So, pegs and exit routes, right? So, that route still depends on available liquidity. Configured limits and external stablecoin conditions.

1:12:08Solvency concerns whether asset value covers obligations. That's solvency. Liquidity concerns whether the asset needed for the payment are actually available right now when you're trying to use it. These are all exit routes. A solvent-looking system can face an inconveniently immediate withdrawal demand. Self-custody removes one custody arrangement. It does not remove the backing behind it, right? Redemption and counterparty dependencies

1:12:40of an asset in the wallet. So, if you have a wallet, you self-custody whatever asset it is, that's great. But when you go to do anything like sell it, you still need these these counterparties, right? These backings. You are dependent on them to redeem, to have redemption into some other form of asset. So, the exit analysis follows the whole path here. SUSDS to regular USDS.

1:13:08You're basically selling like a share of that of that, you know, savings USDS, right? Into regular pegged USDS dollar coin, right? Stablecoin. Then any future conversion or sale after that. So, Sky back borrowing. Hypothetical parameters, right? We're using this as an example. You have $10,000 as collateral. So, this is to take everything we just said and kind of, as far as borrowing

1:13:40goes, make it relevant with numbers. You have 10,000 in Sky collateral. The debt is 4,000. Starting ratio, therefore, is [music] 40%. 8,000 collateral is a 50% boundary. Interest increases debt. So, the boundary can arrive sooner than you would expect. Does that make sense to you? If not, you may want to raise your financial IQ.

1:14:13Especially if you're going to be borrowing money anywhere, cuz a lot of these things are very similar even in TradFi. So, borrowing against staked Sky token induces, introduces debt and a variable borrowing cost. Of course, you're going to immediately have some debt because if you borrow money, you will need to pay interest, and they expect they have that interest calculated into the loan, regardless, right? So, you're going to need to pay

1:14:40that before you can pay it off, no matter if you turned around and tried to pay it immediately. And you usually pay interest on a loan first before you pay any money towards the principal of the loan. It also makes the position sensitive to the collateral's marketing market price. Staking without borrowing does not create that loan liquidation exposure. Illustrative mechanisms not live Sky

1:15:08collateral perimeter, right? So a holder has 10,000 of collateral and borrows 4,000 dollars. Starting debt to collateral is 40% because they've only borrowed 40% of the collateral. Now most people are probably thinking here, I have 10,000 why wouldn't I just borrow 10,000? Well, you'll see. Assume liquidation becomes possible at 50%. A collateral decline to 8,000 reaches that assumed boundary even

1:15:44though the debt has not changed. Like you still only borrowed 4,000 dollars and you're thinking in your mind, I have 10,000 dollars so if my collateral goes down to 8,000 dollars, I should still be good. No. That's not true. That is why it would be very important that you understood how this works before you go actually do it. So borrowing interest can bring the boundary closer by increasing debt.

1:16:13Liquidation sells collateral to recover that loan. If the sale does not recover enough, somebody must absorb the shortfall. Sky back credit contains a possible feedback loop. A fall in Sky's price can weaken collateral. At the same time, confidence in the protocol is under pressure. This is why the STUSDs exposure deserves its own risk analysis. It is a different strategy. Reserves and

1:16:47sustainability. So, you have 82 million historical reserves, and that is from June 30th, 2026, quarter two. And 150 million reserve floor published TMF policy. Neither number is verified October cash balance. Sky's financial buffer sits between operating success and downstream distribution. The quarter two report recorded 82 million in Sky revenue as of June 30th. That is historical reserve checkpoint, not live figures for

1:17:19right here, right now. So, the published treasury management function configuration uses a 150 million reserve building floor. A buffer protects against some losses in timing mismatches. Its adequacy depends on the scale and risk of obligation it supports. Treasury inventory of Sky is different from liquid stablecoin capital. Both have value. They do not meet the same immediate payment needs. Higher

1:17:50retention can strengthen financial protection while reducing near-term distribution. That trade-off should be visible in the token thesis. So, valuation discipline. We got tokenomics. We've gone over tokenomics enough times. So, here the small gap is different from a low float launch with a larger apparent dilution. We're just talking about the difference between circulating and um max cap of tokens. Do not divide Sky's valuation by collateral

1:18:22or stablecoin supply and call the result cheap. Those assets support other financial positions and obligations. I am moving a little quickly through this. So, gross protocol revenue is not a corporate earning stream legally belonging to every token holder. We go over that kind of thing in almost every token autopsy. Kado is in proof you have active protocol October 5th poll US DS supply defined in keeper rate updates. Then you

1:18:50have this executed change. August and September settlement executives took effect. Institutional use, well, Galaxy's disclosed SUS DS position supports adoption. Broader retained use matter for more than adding the same announcement to another slide. Capital management product access, right? So, you have completed allocations actual purchases in capital management. Product access simpler

1:19:19interface can reduce friction, what we call abstraction, right? Uh sustainable growth can still need users who understand what they are holding and understand what they're using, or they could get really burned and the people providing capital are hoping you get burned so that they can take your money. Uh that's just the way it works. It's like the bears versus the bulls and nobody's mad about the way the game is until they get burned. So, reserve

1:19:45progress stronger buffers could change downstream allocation subject to the applicable rules. Do not assume a target has been reached. Here, a keeper is an automated operator performing the rate update job under specified rules. The poll remains a proposal in the in [music] this October 6th snapshot, not merely implemented changes, right? There is a bit of a delay when they do things. So, the interpretation here is the supply

1:20:15definition matters because a capital buffer target depends on which obligations are counted. Governance details can affect protection and downstream economics without looking particularly exciting on a poster. Margin quality, growth becomes more valuable when income expands faster clicking buttons faster than the cost and risk incurred by earning it. All right. So, we got through all of that. Let's go the uh bull case, base

1:20:52case, the middle, and the bear case, right? So, the bullish case here should be rather obvious. Stablecoin demand remains durable. Capital earns attractive risk-adjusted return. Reserves strengthen and implemented economic channels deliver sustained benefits to the Sky token participation. The kind of in the middle here is that Sky remains a useful financial network

1:21:16with variable income and distribution. Sky has real economic participation, but governance rates and valuations remain an important constraint. So, it just kind of stays in the middle. It's not crazy bearish, it's not crazy bullish. It just is a product if you understand how to use it. So, bear case here is competitive yield draws capital away. Its competitors get the best of it. Income compresses or collateral losses

1:21:47assume surplus. That surplus has to be given up by losses. So, rewards weaken while token is volatile and concentrated control make the investment case much harder. These are the scenarios. We're not saying that those things are going to happen. A functioning buyback mechanism can coexist with a falling token price. Mostly because enough of it isn't being burned. The mechanism is one input into value, not control of the entire market.

1:22:18Green flags. A recognizable financial use case and substantial operating costs. These are things that it's doing well. Documented products with different risk boundaries and implemented token economic channels. I had no idea until we started till I started putting this together and doing this, how much actually Sky has going on inside their ecosystem. There's a lot of different things once you understand them, maybe you could sit down and put

1:22:45together a strategy that could be very profitable. I don't know, I haven't gone to that step yet. So, public governance, technical documentation, and financial reporting. Red flags to monitor here, of course, is that gross revenue presented as staker income when it's not, and buyback presented as if a full purchase tokens are being burned. You're you're you're buying back, but not all of it's being burned. Stablecoin yield uses used to

1:23:14promote the governance token, and concentration hidden behind a large holder or delegated count in the governance, higher returns presented without their credit and withdrawal conditions, and still requiring stronger evidence. All right. Savers, borrowers, stakers, four different assets, four different claims. All right. So, we're just going to go over one more time, and this is just as

1:23:41good for me as it is anybody else, that's for sure. You have USDS, which is a dollar stablecoin. So, USDS stablecoin. And the last thing in an exit route outside of the ecosystem. That's probably the most important thing for you to know is that when you get to USDS, you're either first coming in or you're leaving, right? Most likely, you're in that exit route. So, SUSDS is a savings receipt, a variable savings return and protocol

1:24:15risk. Then you have STUSDS, right? We're just throwing ST in front of the stable coins ticker. Capital for Skyback loans, credit losses, and withdrawal liquidity. And then you have Sky token. This all comes back to the token autopsy of Sky token. If you're holding Sky token, understand where it fits inside its own ecosystem. It is governance and optional staking,

1:24:44token price governance and reward policy. Mosta says, "Good stuff tonight." Thank you. You're absolutely welcome. Thank you for being here. And as I always say, I love to do this for myself and increase my crypto IQ. And if a few people learn something, then I feel like I did a good job. So, the same ecosystem can offer useful positions to people with different objectives cuz there's

1:25:10different things going on. A saver wants dependable redemption path. A borrower wants financing. A governance participant participant wants influence. Been a long time talking. And a token investor needs an argument about value. And we are specifically talking about a token investor. None of these arguments can be borrowed from the neighboring product merely because the logos match. Revenue examples here. This is

1:25:43hypothetical 100% growth or $100 growth. All right. So, reserves, $20. Staking rewards, $9. USDS staking rewards, $9 and a buyback and burn, two. Hypothetical dollar using a reported stage two allocation proportion. You start with $100 of gross revenue. Assume funding and other um applicable costs, so just costs, leave $40 eligible for allocation out of that $100. The costs are invented for the

1:26:24example, they are not Sky's reported ratio. This is an example if you didn't realize that. Moses says, "Have to get home now. See you guys later." Absolutely understand. Get home safe, for sure. So, this shows why the protocol made $100 does not mean $100 went to holders. The $9 Sky channel fund reward in Sky is not an extra $9 of USDs payments for every staker.

1:26:58Each participant share depends on the channel selected. The staking participation and the reward mechanism. The reserve portion protects the system rather than disappearing into an account cupboard. It still reduces the amount currently available for distribution. A token thesis needs the complete sequence, income, costs, financial protection, allocation, and the

1:27:25participant's actual share. So, $100 Sky equals $100 plus six Sky rewards gives you 106 Sky times about 80 cents, right? Is about $84. 6% more units, 15.2% less dollar value. Does that make sense? Did everybody understand that? And again, this is a hypothetical. It's just saying the same thing we just went over. You could always pause it if you were that interested if you're watching this

1:28:05later on. For any yield claim, establish the asset that's held, the source of the return, the costs ahead of it, the conditions for receiving it, and the route out. Fees that will be paid along that route to exit. Then distinguish implemented mechanisms from forecasted income. It does not submit a buy order on our behalf. The product can work exactly as designed while the token remains difficult investment. Uh successful

1:28:36engineering is useful. It does not submit buy orders on our behalf, giving it a 78 out of a 100. This actually did really, really well in our token autopsy. I got to say I'm a little bit surprised. I am. Definitely a little bit surprised at how well this wound up being from when I first started going over everything.

1:29:09As you can see, 18 out of 20 utility adoption, token value capture 15 out of 20, that's that's okay. Like it's it's what, 75%? Tokenomics and supply 12 out of 15, but everything else scored pretty well. Competitive moat 13 out of 15, security and decentralization 6 out of 10, catalyst execution 8 out of 10, and risk and unanswered questions is 6 out of 10. Again, landing it on the watch list, it is short by two points.

1:29:43Why it earns the points. Well, Sky solves recognizable financing and stablecoin needs. And this stuff will be published in other places. I'm not going to go through each one cuz we just spent a lot of time going through each category and breaking it down. This is like a recap. And I usually post this to Twitter and stuff, but it's all going to get organized and go inside the

1:30:09Discord, for sure. So, Ave in 82 pass. The only passing thing, but Sky is now number two on our leaderboard. So, we don't have a new winner, but very close. And Morpheus that we did yesterday is our new lowest coin, but it's tied with Render. Oh, wait. Am I wrong? Are those not the lowest coin? No, they're not the lowest coins. Sorry.

1:30:44HBAR, I believe. Yeah, HBAR is the lowest coin. And this will be available as well. This whole slide all the way through. All of it's going to get organized and be available for you guys at a later date. What is going on? Take me to the top. There we go. Got some Kindred stuff. What is this? First and foremost, follow me

1:31:16underground crypto. Crypto Ron at _groundcrypto. Give me a follow over on X Twitter. I greatly appreciate it. Our uh Athena investors got their 2028 [music] tokens today. Holders got a buyback with a waiting room. It's almost up to about 7,000 views. That's pretty great. And there's a whole bunch of information here. There is a ton of people with Athena type content, and I thought, hey, this is a great post

1:31:50to do. Struggled hard with the glasses. And uh man, I'm feeling it from the gym, for sure. Trying to finish this protein shake. It's not whey protein, I promise. Don't I don't think you should drink whey protein, but hey, I'm not a health advisor either. Anyways, come check it out. Posting a lot of great stuff over here and if you don't know in the D 5 tab, posting a lot of great stories um oh that I find over

1:32:23there as well. Thank you for coming Underground Crypto. It was heavy, it was a lot, but if we don't raise our crypto IQ then how are we going to edge out our competitors? What is your competitive moat? As an individual person in crypto, what is your competitive moat? What do you got up here that you understand that the average

1:32:46person does not? Have you raised your crypto IQ? If you're already here, you you definitely already get what I'm saying. And if you've been here consistently for a while, there's no way. There's no way you haven't raised your crypto IQ, right? So, smash that like button. I'll catch you in the next one. Tomorrow 8:30 p.m. New York time. What are we going to be going over? It's a little bit of a mystery. I'm not going to let you know

1:33:10yet, but that's the whole point of being in our Discord. I will pin that in the chat here. It's like 2 days, 3 days in a row that I forgot to do that. All right, now it's pinned. It's also in the description if you're watching this later. I have a feeling that this token autopsy will get watched a lot more later. Anyways, I'll see everybody tomorrow night 8:30 p.m. New York time. Later

1:33:38Strugahart. Later Reliable J. Thanks for staying till the end. Later everybody. Later Blues Guy. Mr. 3000. Melissa, of course, she was headed home. Think I covered everybody. Thanks for the super chats. I'll catch everybody tomorrow night. Stay on the ground, stay crypto, think long term.