About $893 million of Sky USDS left circulation in a single day. DefiLlama’s daily series for the Sky Dollar shows USDS on Ethereum at $6.47 billion in its 6 November 2026 reading and $5.58 billion in its 7 November reading, both taken at midnight UTC, which puts the drop on Friday 6 November. Sky USDS supply stood at $5.63 billion in DefiLlama’s stablecoin list at 05:47 UTC on Sunday 8 November. That is 12% less than a week earlier ($6.40 billion) and 17.5% less than a month ago ($6.83 billion).
Nobody has said who redeemed the tokens or why. By 05:50 UTC on Sunday there was no statement from Sky or from the allocators that manage its money, and no thread on Sky’s governance forum, about a large redemption, a liquidity event or a change in rates.
The peg held. DefiLlama priced USDS at $0.9997 at the same reading, so this was money leaving at par, not a stablecoin trading at a discount.
The same move shows up in DefiLlama’s staking or liquidity, measured at current market prices. It is the main size metric in DeFi.">total value locked (TVL) for Sky Lending, the protocol that holds the collateral behind USDS. It fell from $4.78 billion in the 6 November reading to $4.21 billion in the 7 November one, a one-day drop of about $567 million, and stood at $4.31 billion in DefiLlama’s 03:44 UTC data point on 8 November. Over seven days DefiLlama shows a fall of 14.8%, the “15% in a week” that The Defiant reported overnight.
Sky USDS supply fell in one step, between 6 and 7 November
The decline did not start that day. USDS on Ethereum, where almost all of it lives (Solana and Base carry about $4 million each), peaked at $7.06 billion on 16 October and slid by about $590 million to $6.47 billion by 6 November. What changed on Friday was the size of the move: more in one day than in the previous three weeks put together.
| Date (DefiLlama daily point) | USDS on Ethereum | Sky Lending TVL | USDC in Sky Lending |
|---|---|---|---|
| 2 November | $6.38B | $5.02B | $3.63B |
| 4 November | $6.52B | $4.85B | $3.49B |
| 5 November | $6.49B | $4.93B | $3.48B |
| 6 November | $6.47B | $4.78B | $3.44B |
| 7 November | $5.58B | $4.21B | $2.87B |
| 8 November | $5.58B | $4.27B | $2.93B |
The token contract agrees. Reading the total supply directly from the USDS contract on Ethereum (0xdC035D45d973E3EC169d2276DDab16f1e407384F) through a public node gave about 5,628 million USDS at 05:48 UTC, in line with DefiLlama. A public node does not keep the history of 6 November, so the burn transactions and the addresses behind them are not identified here.
What USDS and Sky Lending are
Sky is the former MakerDAO, and USDS is its dollar stablecoin, the successor to DAI. Our project page on Sky (ex-MakerDAO) covers the organisation and its token. USDS can be minted against crypto collateral, the model explained in our guide to CDP stablecoins such as DAI and USDS. It can also be swapped one for one with USDC through Sky’s peg stability module, a blockchain that runs exactly as written when it is called, holding and moving funds according to its code, without an intermediary able to change the outcome.">smart contract holding reserves of two or more tokens, supplied by users, that a decentralized exchange uses to execute trades automatically at a price set by a formula.">pool of USDC that lets holders move in and out of USDS at par.
Holders who deposit USDS in Sky’s savings contract receive sUSDS, which earns the Sky Savings Rate. Sky.money listed that rate at 3.80%, set by governance, according to The Defiant on 8 November. How sUSDS and other interest-bearing dollars work is in our guide to yield-bearing stablecoins.
DefiLlama files Sky’s collateral under “Sky Lending”, a separate entry from the $659 million of SKY tokens staked on Ethereum, which barely moved over the period.
Sky Lending TVL fell 15%, and the token table points to USDC
DefiLlama breaks Sky Lending’s TVL down by token. In that table, USDC dropped from $3.63 billion on 2 November to $2.97 billion at 03:44 UTC on 8 November, and from $3.44 billion to $2.87 billion between the 6 and 7 November points alone. Wrapped ether (WETH) stayed near $1.27 billion and wrapped bitcoin near $25 million over the same days; proof of stake coin with a protocol that stakes it for you and issues a transferable token (such as Lido stETH or rETH) representing the deposit plus rewards, which you can use or sell while the coins stay staked.">wstETH, at about $50 million, had already slipped from $82 million on 3 November.
In DefiLlama’s table, USDC fell by $568 million between the same two readings, as much as the whole $567 million TVL step, while the other tokens were roughly flat, and $893 million of USDS disappeared over the same 24 hours. That is the pattern a swap out through the peg module leaves: the holder hands back USDS, which is burned, and takes USDC out of the pool, so supply and TVL fall together. The table does not show who made the swaps or where the USDC went next, and Sky has not commented on it.
The two figures do not match dollar for dollar, which is a further reason for caution. TechFlow, citing The Defiant and DefiLlama, also noted that TVL is computed from the market value of assets, so its fall “does not directly equate to net withdrawals”.
The wider stablecoin market had its sharpest week of 2026
Sky was not alone in shrinking. Blockchain Reporter, using DefiLlama data, counted total stablecoin supply at $292.31 billion on 7 November, down $6.66 billion in seven days, the steepest weekly drop of 2026. Its three largest daily falls were 29 October (-$1.49 billion), 3 November (-$1.60 billion) and 7 November (-$1.42 billion).
USDS was the third-largest contributor to that weekly drop in dollars, behind the two giants. Between 31 October and 7 November, by Blockchain Reporter’s count, USDT lost $3.10 billion, USDC $1.31 billion and USDS $864 million. In relative terms, the USDS fall (about 13%) was far heavier than the USDT one (under 2%). Two dollar tokens grew in the same week: Ethena’s USDe added $404 million and Ripple’s RLUSD $270 million.
Blockchain Reporter read the week as redemptions and softer demand rather than stress: “The dollars left through redemptions, not through a discount.” By its figures, USDT traded at $0.9989 and USDC at $0.9995 at 01:03 UTC on 8 November. The market-wide decline began on 29 October, the day of the Binance breach; the outlet noted that neither issuer has linked the two, and no source links the breach to Sky or to the USDS redemptions. Our report of 26 October on stablecoin supply sitting $13 billion below its May peak covers the earlier waves.
What the data does not show
Several easy explanations do not fit the numbers. No change to the Sky Savings Rate appears among the proposals on Sky’s forum since late October, and Sky.money still listed 3.80% on 8 November, so a rate cut pushing holders out is not supported. DAI, Sky’s older stablecoin, moved from $4.73 billion a week ago to $4.66 billion, so this is not money switching from DAI to USDS or back.
Spark, Sky’s lender and one of its capital allocators, did not shrink either. At 05:47 UTC on 8 November, DefiLlama showed the Spark Liquidity Layer at $2.74 billion, up 4.0% in seven days, and SparkLend at $5.01 billion, up 1.0%. Only Spark Savings, its deposit product, slipped, by 3.3% to $1.30 billion. Spark has had its own unexplained exit this autumn, described on our Spark (SPK) project page, but its figures this week point the other way.
Sky’s governance forum showed routine business on Sunday morning. The latest threads are the weekly Atlas edit proposal for the week of 9 November (Atlas is Sky’s rulebook), posted on 7 November; proposed changes to Grove and to Osero for the executive spell of 19 November; October’s delegate pay; and the offboarding of two long-inactive legacy peg modules (GUSD and PAX). None of them deals with a large redemption or the fall in supply.
What is still unknown, and what to watch
The main unknown is who held the $893 million. One large holder swapping out through the peg module, an exchange, an institution or an allocator rebalancing would all leave the same mark on DefiLlama’s daily totals. Whether it was one wallet or many can be settled from the burn transactions of 6 November on Ethereum, which DefiLlama’s daily totals do not break down.
The second unknown is whether it continues. The 8 November readings are flat so far: USDS on Ethereum at $5.58 billion, unchanged from 7 November, and Sky Lending TVL slightly up at $4.31 billion. DefiLlama’s daily USDS series and the USDC line of Sky Lending will show by Monday whether Friday was a single exit or the start of a larger one. The next fixed date on Sky’s calendar is the executive spell of 19 November.