Overcollateralized borrowers deposit funds into Sky and receive DAI stablecoin.

Sky is a non-custodial stablecoin protocol built on Ethereum. Sky (previously MakerDAO) was founded by Rune Christensen and launched in 2015.

SKY tokenholders own and govern the protocol. They currently take all of the total interest and PSM fees paid by borrowers (revenue). Sky’s investors include a16z, Polychain, IOSG Ventures, etc.

governance

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Sky | Fees and revenues breakdown

# Sky Revenue Methodology

## 1. Overview

Sky revenue measures the total daily income generated by the Sky protocol (formerly MakerDAO) from its decentralized stablecoin infrastructure. This metric captures all revenue streams including stability fees (interest charged on debt), liquidation income from bad debt recovery, trading fees from the Peg Stability Modules (PSM), Direct Deposit Module (D3M) interest, Real World Asset (RWA) returns, and Sky Stars settlement interest. The calculation aggregates these diverse income sources and converts them to USD using end-of-day price feeds.

## 2. Data sources

- **Blockchain events**: `Bark` events from `Dog` contracts, `Bite` events from `Cat` and `CatV0` contracts, `Toss` events from RWA JAR contracts, `Fees` events from `D3MHub` contracts, `UpdateAddress` events from `ChainLog` contracts, and ERC-20 `Transfer`, `Mint`, and `Burn` events for DAI and USDS, plus `frob`, `grab`, `drip`, `move`, and `suck` function calls from `Vat` and `Jug` contracts, covering Ethereum
- **External data**: End-of-day price feeds for DAI and USDS, and asset metadata including decimal precision

## 3. Step-by-step calculation

### Component A: Stability fee revenue calculation

- **Purpose**: Calculates interest revenue from debt positions across all regular collateral types
- **Logic**: Rate changes are tracked through `Jug` contract `drip` function calls and debt changes are tracked through `Vat` contract `frob` and `grab` functions. Cumulative debt balances are maintained for each collateral type using windowing functions. When a rate change occurs, interest accrual is calculated as (new rate - previous rate) multiplied by the outstanding debt balance before the rate change. Rates are stored in 27-decimal precision and debt amounts in 18-decimal precision. Specialized collaterals (D3M, RWA, Sky Stars) that have dedicated revenue tracking are excluded to prevent double counting.
- **Key fields**: `ilk` (collateral identifier), `value` (rate or debt change amount), `function_type` (drip, frob, or grab), and calculated `interest_accrued`

### Component B: Liquidation income calculation

- **Purpose**: Captures revenue from liquidating undercollateralized debt positions
- **Logic**: Seized liquidations (collateral taken by the protocol) are combined with settled liquidations (debt pushed to auction). Seized liquidations are identified by tracking DAI flows to the balance sheet address (`0xa950524441892a31ebddf91d3ceefa04bf454466`) while flows from system accounts, treasury operations, and specific transaction types are excluded. Settled liquidations are captured from `Bark`, `Bite`, and legacy `Bite` events that represent debt being auctioned. The net amount (seized minus settled) represents liquidation income, with positive values indicating profit to the protocol.
- **Key fields**: `DAI_destination_address` and `DAI_source_address` for tracking flows, `due` and `tab` for auction amounts, and calculated net `amount`

### Component C: PSM trading fee calculation

- **Purpose**: Tracks trading fees generated by Peg Stability Modules during stablecoin swaps
- **Logic**: PSM-related transactions are identified by filtering `Vat` `frob` function calls where the collateral identifier corresponds to PSM collateral types (those with names like 'PSM-USDC-A'). For these transactions, associated DAI flows from the PSM account to the Sky balance sheet address are tracked. These flows represent trading fees collected during PSM swap operations.
- **Key fields**: `i` (collateral identifier), `DAI_source_address` (PSM account), and flow `amount`

### Component D: D3M interest revenue

- **Purpose**: Captures interest earned from Direct Deposit Module deployments to external protocols
- **Logic**: Two types of D3M revenue are tracked. First, direct DAI flows from the Aave D3M address (`0xa13c0c8eb109f5a13c6c90fc26afb23beb3fb04a`) to the balance sheet address representing earned interest. Second, `Fees` events emitted by the `D3MHub` contract that report interest earnings are parsed. Both sources use 18-decimal precision for amounts.
- **Key fields**: `DAI_source_address` (D3M contract), `amt` (fee amount from events), and flow `amount`

### Component E: RWA interest collection

- **Purpose**: Records interest payments from Real World Asset investments
- **Logic**: `Toss` events emitted by various RWA JAR contracts (RWA007-A, RWA009-A, RWA014-A, RWA015-A, and PSM-related JARs) are captured. These events represent periodic interest payments or principal returns from off-chain investments. Each event includes the collateral identifier and payment amount in 18-decimal precision.
- **Key fields**: `wad` (payment amount), `ilk` (collateral identifier), and event metadata

### Component F: Sky Stars settlement interest

- **Purpose**: Calculates interest revenue for Sky Stars allocator products (ALLOCATOR-SPARK-A, ALLOCATOR-BLOOM-A, and ALLOCATOR-OBEX-A) through the Monthly Settlement Cycle
- **Logic**: Rate changes from `drip` function calls are combined with debt increases from `grab` function calls for specific allocator collaterals. Current rates are forward-filled across events to calculate total debt increases. ERC-20 USDS transfers between the protocol and Star subproxy addresses are aggregated to determine the Star's revenue share. Protocol revenue is calculated as the net difference between the total debt increase and the Star's revenue share, ensuring appropriate attribution for each settlement period.
- **Key fields**: `dart` (debt change), `rate` (current rate), and calculated `sky_revenue_amount`

### Component G: Spark interest share adjustment

- **Purpose**: Deducts the portion of interest accruals allocated to the Spark protocol for historical periods
- **Logic**: For the ALLOCATOR-SPARK-A collateral, a fixed total amount of interest is attributed to Spark for specified historical timeframes. This amount is distributed daily across the period, weighted by the daily proportion of total interest accrued. These values are subtracted from the protocol's total interest revenue to reflect the revenue-sharing agreement with Spark.
- **Key fields**: `interest_accrued`, `total_interest`, and the calculated Spark share `amount`

### Component H: Final aggregation and USD conversion

- **Purpose**: Combine all revenue components and normalize to USD
- **Logic**: All revenue components are unioned and aggregated by day, chain, product, and collateral type. Consistent field structures are maintained across all components including timestamp, chain identifier, product identifier, and collateral information. Revenue amounts are converted to USD using end-of-day price feeds. The transition from DAI to USDS on December 1, 2024, is handled by switching the token address and price feed source based on the transaction date. Blockchain events are truncated to daily boundaries to create consistent daily revenue totals. The final metric is calculated by summing all component revenues after USD conversion.

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

fees * take_rate (illustrative — revenue is observed directly per project, not derived from take_rate)

Fee revenue retained after supply-side payouts. Before cost of revenue (e.g. L2 DA fees) and before operating expenses.

SkySKY

Revenue

Revenue

Competitive landscape

Chain breakdown