Sky Protocol’s Big ETH Positions Are Hanging by a Thread

• Sky Protocol holds two large ETH positions near liquidation, protected by the Oracle Security Module’s one-hour delay.
• USDS stablecoin from Sky surpasses rivals as multichain expansion and OpenOcean integration strengthen its ecosystem.

Sky Protocol—formerly known as MakerDAO—is in a bit of a nervous situation. Two of its massive Ethereum (ETH) positions are currently on the brink of liquidation. According to DefiLlama, the first sits at $1,786, worth about $115 million. The second sits a little higher, at $1,805, worth about $109 million.

Should ETH drop below these benchmarks, the consequences could resemble a domino effect: a single misstep could bring down the entire stack.

When Seconds Matter: Sky’s Safety System in Action

However, Sky Protocol isn’t without its own safety net. It has a key feature called the Oracle Security Module (OSM). This mechanism works like a safety belt on a roller coaster—it keeps sudden pressure from crashing.

By averaging prices from multiple sources and adding a one-hour delay before triggering a liquidation, OSM gives it some breathing room when the market is swinging wildly. While it may not be a perfect solution, it provides sufficient time for contemplation before the situation deteriorates.

One of those two positions was already close to being derailed on March 11. Luckily, its owner was quick to respond. They added 2,000 ETH as additional collateral and repaid part of the loan in the form of DAI stablecoin worth $1.5 million. Meanwhile, the second position has remained stagnant for five months, lacking any additional collateral or movement.

USDS Overtakes Rivals With Smart Moves and Bold Expansion

On the other hand, Sky Protocol is also making history in another sector, stablecoins. Their stablecoin, USDS, just surpassed Ethena’s USDe supply this March. Earlier in February, CNF reported that USDS’ supply had surpassed 9 billion, even overtaking DAI and making it the new leader in the decentralized stablecoin space.

This achievement did not come easily. Sky Protocol carefully adjusted the savings rate for USDS without sacrificing a strong reserve. While many other protocols were hesitant, Sky expanded its multichain adoption to networks like Ethereum, Base, and several others. Imagine a restaurant that is not only popular in one city but has branches in several countries at once—that’s the approach now.

Meanwhile, Ethena has taken the opposite direction. They have started to reduce the supply of USDe because the Ethereum market is slowing down.

It’s like two stores selling similar goods, where one continues to stock and expand, while the other limits shipments for fear of overstock. The competition between the two is still raging, and only time will reveal who is better equipped to endure through all seasons.

OpenOcean Integration Gives Sky a Cross-Chain Edge

Furthermore, Sky Protocol has also received a boost from OpenOcean. The aggregator platform now supports the Sky ecosystem on Ethereum and Base. This means that cross-stablecoin trading, such as USDS, sUSDS, and USDC, is smoother. In the complex world of cryptocurrency finance, this action is akin to activating a toll gate during a traffic bottleneck, resulting in increased speed and efficiency.

Meanwhile, as of press time, SKY is swapped hands at about $0.05460, down 7.91% over the last 24 hours and 14.07% over the last 30 days.

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