sUSDS is the yield-bearing receipt token you get when you deposit USDS into Sky's Savings Rate module. It accrues the Sky Savings Rate (SSR) automatically by appreciating in value against USDS, so the balance stays constant while the redemption ratio climbs. This guide covers how sUSDS works, the SSR's historical range, mint and redeem mechanics, and how it stacks against sDAI, sUSDe, and sFRAX.
What is sUSDS?
sUSDS is an ERC-20 wrapper around USDS deposited into Sky's Savings Rate contract. Each sUSDS represents a pro-rata claim on the USDS pool plus accumulated SSR yield. The token does not rebase. Instead the USDS-per-sUSDS exchange rate increases block by block, similar to Aave's aTokens in a non-rebasing variant or Compound's cTokens.
Sky launched sUSDS in September 2024 alongside the MakerDAO-to-Sky rebrand. It is the direct successor to sDAI (the DAI Savings Rate token) and the two coexist while Sky migrates liquidity.
How does the Sky Savings Rate work?
The SSR is set by Sky governance via SKY token votes. It draws yield from the same collateral that backs USDS: real-world assets (Treasury bills via Monetalis and BlockTower), crypto-collateralized vaults, and protocol-owned liquidity. When collateral earnings exceed the rate paid to sUSDS holders, the surplus flows to the Sky surplus buffer. When they fall short, the buffer covers the gap until governance adjusts the rate.
SSR is a per-second compounding rate expressed as an APY. It updates whenever governance passes a Spell, typically in response to T-bill yield shifts or competing onchain rates.
What has the historical SSR range been?
Since the September 2024 launch, the SSR has tracked the DAI Savings Rate (DSR) closely and ranged roughly 5 to 12.5% APY. The peak coincided with the November 2024 governance vote that lifted SSR to 12.5% to defend USDS demand during a competitive stablecoin yield cycle. Through 2025 the rate normalized into the 6 to 8% band as T-bill yields softened and Sky rebalanced its collateral mix. Always check the current rate on sky.money before quoting a number.
How do you mint and redeem sUSDS?
Mint by depositing USDS into the SSR module at app.sky.money, or via any frontend that integrates the contract (DeFi Saver, Instadapp, and several aggregators). The flow is one transaction: approve USDS, then call deposit. You receive sUSDS at the current exchange rate.
Redeem is symmetric. Call redeem (or withdraw) on the same contract and the protocol burns your sUSDS, returning USDS plus accrued yield. There is no lockup, no unbonding period, and no withdrawal fee. Gas is the only cost. If you hold sUSDS on a chain other than Ethereum mainnet (Base and Arbitrum are supported via Sky's official bridges), you bridge back to mainnet first or use a frontend that abstracts the round-trip.
sUSDS vs sDAI: what changed?
sUSDS is functionally identical to sDAI but built on the USDS rebrand. Sky kept sDAI live for backward compatibility, so DAI holders can continue using the DSR without migrating. Three practical differences:
Branding and governance: sUSDS sits under the Sky ecosystem with SKY governance; sDAI remains under the legacy MKR-compatible interface.
Yield rates can diverge: SSR and DSR are set by separate governance votes and have occasionally drifted by 50 to 200 basis points.
Sky's growth incentives (Sky Token Rewards, the SKY airdrop farming module) are wired to USDS and sUSDS, not DAI or sDAI.
For most users the choice comes down to which stablecoin they already hold. If you need to swap, USDS and DAI are 1:1 convertible through Sky's official converter at zero slippage.
How does sUSDS compare to other yield-bearing stablecoins?
The yield-bearing stablecoin category has four main players in 2026: sUSDS (Sky), sUSDe (Ethena), sFRAX (Frax), and the legacy sDAI. Each generates yield differently, which drives different risk profiles.
Token | Issuer | Yield mechanism | 2025-2026 APY range |
sUSDS | Sky | T-bills + crypto vault interest, governance-set rate | 6 to 12.5% |
sUSDe | Ethena | ETH staking yield + perp funding rate arbitrage | 4 to 25%, volatile |
sFRAX | Frax | T-bills via FinresPBC + AMO surplus | 5 to 8% |
sDAI | Sky (legacy) | Same as sUSDS, separate governance rate | 5 to 12% |
sUSDS and sFRAX are the most stable of the four because their yield sources are predominantly T-bills. sUSDe offers the highest upside but the yield collapses (and can briefly turn negative) when perp funding flips, as it did in early 2025 during the post-rally drawdown. sDAI tracks sUSDS closely but with slightly thinner integrations going forward.
Is sUSDS safe?
Risk is concentrated in three places. First, smart contract risk: the SSR module inherits the Maker codebase, which has run for years without an exploit, but no audit is a guarantee. Second, collateral risk: a sharp drawdown in crypto-backed vaults or a counterparty failure on the real-world asset side would tap the surplus buffer first and sUSDS holders only if the buffer is exhausted. Third, governance risk: SKY voters can change SSR or pause the module. The peg of USDS itself is a separate question covered in our USDS vs DAI 2026 piece.
Where can you use sUSDS as collateral?
sUSDS is accepted as collateral on Aave v3 (Ethereum and Base markets), Spark Protocol (Sky's native lending market), Morpho Blue isolated markets, and several stablecoin AMM pools on Curve and Balancer. Using sUSDS as collateral lets you keep earning SSR while borrowing against the position, which is the typical "looping" trade.
Methodology and sources
Mechanism and rate history from sky.money and Sky's official documentation. Collateral composition from the Sky governance forum and Block Analitica's MakerBurn dashboard. Comparison APY ranges cross-checked against DeFiLlama Yields and each protocol's official dashboard between January 2025 and May 2026. We do not quote a live SSR number; always confirm at sky.money before transacting.