<div id="readability-page-1"><div><div><p>Author: Jae, PANews</p><p>While DeFi lending leader Aave is mired in the Kelp DAO hack, another established protocol, Sky, has not only attracted significant investment from whales, with its TVL surging over 25% in the past two weeks, but has also capitalized on this momentum by launching two major initiatives to pave the way for its institutionalization strategy through governance reforms:</p><p>Internally, the protocol has proposed simplifying its treasury management mechanism, shifting the spending model from manual governance voting to hard rule constraints;</p><p>Externally, it is building Laniakea, an institutional-grade on-chain capital allocation infrastructure, attempting to capture a share of the 300 billion idle stablecoin liquidity market.</p><p>Sky is accelerating its efforts to secure a niche in the DeFi new infrastructure ecosystem.</p><p>From Community-Driven &#34;Rule by Man&#34; to Rule-Based &#34;Rule of Law&#34; On April 25th, Sky founder Rune Christensen posted on a governance forum, stating that the asset transfer from Genesis Capital to Grove was complete, officially concluding the Genesis phase of the protocol. During the Genesis phase, Sky adopted a human-driven governance approach: community voting determined expenditures, and funds were allocated discretionarily, providing sufficient flexibility for the early expansion of the ecosystem. However, as the asset size exceeded tens of billions of dollars, the resulting uncertainty and high governance costs gradually became a constraint on the protocol's creditworthiness. The most direct signal was S&amp;P Global's B- credit rating for Sky. S&amp;P Global had directly pointed out Sky's weaknesses: uncontrollable governance risks and opaque capital positions. For a protocol carrying billions of dollars in stablecoin credit, governance uncertainty is itself a significant systemic risk. Sky's solution is to streamline and restructure the Treasury Management Function (TMF). The protocol reduces the complex 5-step waterfall structure to a 4-step fixed framework. The most important constraint is the protocol's hard cap on operating expenditures. Sky shifts from rule by man to rule by law, confining treasury power within the cage of code. In the old system, the community's discretionary power over Step 1 was capped at 21% during the Genesis phase, with the Post-Genesis phase originally planned to be between 4-10%. However, if the percentage was variable, each adjustment required complex governance voting. Therefore, the new proposal directly overturns the entire old system, permanently locking the expenditure percentage at 20%. This means governance friction will be significantly reduced, and at least 80% of the protocol's net revenue will remain within the system for reserve accumulation, token burning, or distribution to holders. For SKY holders and ecosystem partners, a fixed expenditure percentage will be more predictable than highly uncertain governance decisions. The 20% rigid expenditure will make the treasury's cash flow more transparent and harder to manipulate through governance. In essence, while Sky has proactively reduced its governance, it has also offered a pledge of &#34;certainty.&#34; Building an Institutional-Grade On-Chain Capital Operating System. While internally amending its constitution, Sky is also opening its doors to external stakeholders. On April 28th, Sky announced it was building Laniakea, a standardized infrastructure framework for institutional-grade capital deployment, for its Sky Agent Network, aiming to address the idle over $300 billion in the stablecoin market. It's important to note that this &#34;Agent&#34; is not the same as the commonly understood AI Agent. Sky Agent refers to Capital Agent, not the AI ​​Agent as commonly understood. The Sky team believes that the main reason why institutional funds have been hesitant to enter the market for so long is the lack of five key elements: shared infrastructure, standardized smart contracts, risk assessment, data systems, and legal framework. Laniaakea attempts to bridge the infrastructure gap through standardization across four dimensions: Smart contract standardization: template-based deployment, saving institutions the cost of reinventing the wheel; Risk governance standardization: unified risk measurement standards, with losses shared sequentially; Data infrastructure standardization: protocol encoding will be stored in a machine-readable format, supporting real-time AI risk control; Legal compliance standardization: providing a pluggable identity and KYC registration system, a shared legal framework across product lines, and an accountability mechanism for collateral support at each operational level. Under the Laniakea architecture, Sky will no longer be a &#34;lender,&#34; but a network platform of capital agents. Primes: These are the primary agents (Sky Agents), similar to on-chain fund managers, competing for capital allocation quotas and developing investment strategies according to Laniakea's unified standards. Examples include Spark, responsible for DeFi lending, and Grove, responsible for private lending and RWA. Halos: These are Primes, specific financial products incubated based on Laniakea's shared infrastructure, covering various yield streams from government bond RWA to private lending. This layered architecture allows Sky to integrate the expertise of different agents for diversified asset allocation while maintaining a unified framework, thereby significantly improving the scalability of the ecosystem. In other words, based on Laniakea, Sky's role will shift from a &#34;direct operator&#34; to a standardized on-chain operating system designed for institutional capital. PANews believes the protocol's main revenue will come from stability fees, interest rate spreads, and taxes. Stability fees are Sky's most traditional and stable way to generate profit. Whenever Halos managed by Primes wants to be used as collateral to mint USDS on Sky, it needs to pay interest to Sky, which is the stability fee. Laniakea lowers the barrier to institutional access, meaning more institutional assets will enter the system. As the total amount of USDS minted increases, the total amount of stability fees earned by the protocol will also increase. Primes, as a professional asset manager, is responsible for bringing yield strategies to Sky. The protocol will provide liquidity for assets through USDS at a lower cost. Sky earns the net spread between the &#34;strategy yield&#34; and the &#34;USDS funding cost (such as deposit rates)&#34;. Laniakea's standardization allows Sky to manage hundreds of spread channels simultaneously, creating economies of scale. Each individual Prime is essentially a &#34;franchise&#34; of Sky. Generally, Prime issues its own tokens, requiring it to pay a certain percentage of these tokens or a portion of its business revenue to Sky. Even if the protocol doesn't directly participate in issuing a specific product segment, as long as Primes are Halos issued based on Laniakea, Sky can generate revenue through taxation. It's worth noting that because the protocol state is machine-readable, AI will handle functions such as capital allocation and liquidation management. By reading Laniakea's standardized data interface, AI can achieve real-time monitoring of cross-asset exposure, collateral quality, and liquidity depth. When a certain underlying collateral exhibits risk signals such as abnormal interest rate differentials, AI can automatically adjust the credit limit or liquidation threshold of the corresponding Halos according to preset &#34;machine rules,&#34; providing institutions with algorithmic-level capital security protection. Furthermore, machine readability transforms Halos into &#34;standardized Lego&#34; that can be optimized by AI models. AI can automatically switch capital allocations between different risk levels based on market interest rates and volatility, seeking the optimal Sharpe ratio. Overall, Laniakea's AI compatibility will empower institutional capital or Primes at the risk management and investment decision-making levels. Positioning itself at the infrastructure level, but the transformation harbors three hidden concerns. Sky's two actions are not independent but rather a combined strategy. A rule-based treasury management mechanism provides governance certainty for institutional capital, while Laniakea provides technological certainty. Sky's actions also reflect a logical shift taking place in the entire DeFi market: from competition at the application layer (&#34;front-end-heavy&#34;) to competition at the infrastructure layer (&#34;back-end-heavy&#34;). The development path of DeFi lending protocols is evolving from single liquidity pools to layered architectures. The launch of Laniakea is essentially Sky's attempt to secure a niche in the infrastructure layer. Once Laniakea becomes the preferred entry point for 300 billion idle stablecoins, Sky will also upgrade to a central node for on-chain capital allocation. It is worth noting that Sky's transformation is not without risk: a secondary game of governance: although the rules will lock in spending ratios, the power to modify the &#34;rules themselves&#34; still rests with the governance vote. If a governance attack occurs, the long-term effectiveness of the rules may be questionable; Increased technical complexity: Building machine-readable infrastructure that supports real-time AI monitoring is highly challenging. Any vulnerability can be amplified in large-scale deployments; Agent delegation risk: Primes holds significant capital allocation power. Although there is a loss accountability mechanism, in special circumstances, the distribution of profits between the agent and the protocol may still face both legal and technical challenges. From a stablecoin issuer to building the on-chain capital hub Laniakea, Sky is about to complete a transformation from a single DeFi protocol to an institutional-grade operating system. As institutional capital flows in through standardized interfaces, Sky will embark on a new journey.</p></div></div></div>

SDEV

COIN

GLXY

<p>Sky has launched two major initiatives to enhance its governance and institutionalization strategy, following a 25% increase in its Total Value Locked (TVL). The protocol is simplifying its treasury management by shifting from manual governance voting to fixed rule constraints, capping operating expenditures at 20%. Additionally, Sky is developing Laniakea, an institutional-grade on-chain capital allocation infrastructure, to tap into the $300 billion idle stablecoin market. This new framework aims to standardize smart contracts, risk assessment, data systems, and legal compliance, positioning Sky as a network platform for capital agents rather than just a lender.</p>

- Sky, an established DeFi protocol, has seen a 25% increase in total value locked (TVL) while launching initiatives to streamline governance and attract institutional investment.  
- It is restructuring its treasury management system to reduce governance risks and enhance predictability, while also introducing Laniakea, an infrastructure aimed at capturing idle stablecoin liquidity.  
- This shift positions Sky to transition from a single protocol to an institutional-grade operating system, facilitating increased access for institutional assets, although it also introduces risks related to governance and technical complexity.

CoinLive

Stablecoin Development

Coinbase

Galaxy Digital

Circle

Proshares Big Data Refiners ETF

iShares US Digital Infrastructure and Real Estate ETF

Bitwise Solana Staking ETF

T-REX 2X Inverse CRCL Daily Target ETF

Global X Data Center & Dgtl Infrs ETF

Grayscale Solana Staking ETF

Leverage Shares 2X Long CRCL Daily ETF

Amplify Transform Data Sharing ETF

ProShares Ultra CRCL ETF

Siren ETF Trust Siren Nasdaq NexGen Economy ETF

Grove Collaborative

S&P Global

GROVE COLLABORATIVE HOLDINGS INC

Sky's Dual Transformation: Governance Upgrade and On-Chain Institutional Infrastructure