GALAXY DIGITAL PUT $100 MILLION OF SUSDS ON ITS BALANCE SHEET AND TOOK IT AS COLLATERAL ACROSS A $1.4 BILLION LOAN BOOK — THE YIELD IS SET BY A GOVERNANCE VOTE — AND SKY CALLS THAT A FEATURE

Galaxy Digital put $100 million of sUSDS on its own balance sheet and approved the same token as collateral across a trading business that runs an average loan book of $1.4 billion. sUSDS is Sky's savings token. It pays something called the Sky Savings Rate.

That rate is set by a governance vote. Not by a maturity, not by a contract with a counterparty Galaxy can sue, not by anything Galaxy controls. Holders of a governance token decide what a public company's $100 million earns, and they can decide something else next month.

Sky's own people are refreshingly direct about it. Their global head of capital markets said the protocol "was built so the same savings rate can be made available to anyone, from an individual saver to a Nasdaq-listed balance sheet." That is the pitch and it is accurate. A listed company's treasury now earns whatever the vote says it earns.

There is a second piece. Clients who post sUSDS against a loan keep accruing the rate on the whole position for as long as the loan runs, so the collateral and the yield are the same asset. When that rate moves it moves on both sides of the trade at once, for every client at once, on a decision nobody at Galaxy gets a vote in. Somebody should ask what happens on the day it moves down. At the time of this writing, bitcoin was $84,024.