Something strange is happening in the market. Sky is throwing off old school bank style profits, yet the token trades like it is 1 bad governance vote away from the graveyard. The numbers read like a value investor’s fever dream and a governance maxi’s worst nightmare at the same time.
Sky is generating about $500M in revenue with roughly $200M in profit, while the token changes hands at around 2.6x revenue. That puts the protocol at a single digit multiple on earnings that many traditional banks would envy, despite the fact it does not have to maintain sprawling branch networks or meet Basel style regulatory capital rules that weigh on JPMorgan and its peers, which trade around 10x earnings while dragging along all that physical world baggage. Sky looks more like a lean, hyper profitable digital bank quietly compounding in the background than a tired DeFi token limping toward irrelevance.
The behavior around the token itself only deepens the disconnect. In 2025 Sky bought back 1.3B tokens, hoovering up 5.4% of the total supply while spending about $300K per day to do it. That is the kind of aggressive capital return playbook usually associated with a cash rich corporate predator trying to signal confidence and put a floor under its stock. Instead the market shrugged. The token is still down about 42% from September levels, as if traders decided the only thing that matters is narrative decay rather than actual cash flow.
At the same time the core product engine is not exactly dying. USDS, Sky’s rebranded dollar pegged stablecoin, has reportedly climbed to around $9.8B in circulating supply, which would make it the 3rd largest stablecoin in the world and one of the dominant decentralized options in a space still dominated by centralized giants. A protocol that prints hundreds of millions in profit while anchoring a multi billion dollar stablecoin should not logically trade like a distressed asset, yet that is exactly how the market is pricing it.
That is where governance extraction creeps into the story. The bear case is that the same on chain democracy that lets token holders steer a powerful, cash rich protocol can also suffocate it. If governance keeps routing more value to insiders, directing emissions and benefits to a shrinking inner circle, or pushing aggressive rent seeking at the expense of long term growth, the golden goose dies slowly. In that world each buyback just concentrates ownership in a system that is structurally hostile to new capital. The equity looks cheap for a reason.
The bull case is much more explosive. If even a fraction of the market starts pricing Sky as what it already resembles on paper, a profitable DeFi bank with a top tier stablecoin franchise, the token does not need a meme cycle to re rate. At current numbers a move toward something closer to a normal growth multiple could plausibly push the token toward the $0.25 zone just on multiple expansion once someone with size decides this is not a dying protocol but a neglected earnings machine. The buybacks become jet fuel, not life support.
Right now Sky sits in a weird limbo. On one side is the nightmare scenario where governance extraction cannibalizes users, partners, and eventually the balance sheet itself. On the other side is the moment when a serious fund looks at a 2.6x revenue token stapled to a $9.8B stablecoin and realizes it is effectively buying a high margin digital bank at a garage sale price. The chart tells a story of decline, but the income statement whispers something very different. The only real question is which story the market decides to believe first.
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