SKY Inflation Analysis · October 2026 · Mixed flows · supply roughly steady

SKY, the staking and voting token of Sky (the protocol behind the USDS stablecoin, formerly MakerDAO), had mixed flows and a roughly steady supply over the last 90 days. No new SKY was minted, but stakers were paid 196.7M SKY out of the protocol treasury while the Smart Burn Engine bought back 87.4M SKY, so the counted float grew +0.47%, close to the monitor's +0.50%. With buybacks now covering most of the staker pay, the next 90 days project to about +0.14%.

The verdict, in one paragraph

Between Jul 5 2026 and Oct 3 2026 the SKY float grew by a net 109.3M SKY, or +0.47% of the 23.42B SKY counted as circulating. The inflation monitor, which reads the circulating series directly, shows +0.50% for the same stretch, a gap of only 0.03 percentage points — well inside the 0.5-point tolerance, so no warning chip is needed. For the next 90 days the ledger projects +0.14%: SKY staking rewards continue at 143.2M SKY, and the buyback at today's pace and price adds back about 111.0M SKY. The cite-able label: SKY is a recycling token — no minting, a treasury that pays stakers and a buyback that refills it.

Sell pressure: where new SKY comes from

Protocol inflation: 196.7M SKY.SKY's total supply did not rise at all in the window — it actually fell by the 2.86M SKY burned on Sep 13 2026. The sell pressure comes from the SKY staking rewards stream. Sky pays stakers in SKY taken from the protocol treasury, and because the treasury is the one balance kept outside the counted float, every weekly payout adds coins to the market. Eighteen weekly pulls moved 196.7M SKYto the staking reward contract in 90 days. The rate is reset at each monthly settlement from the protocol's net revenue: a July 20 2026 vote set a 286.7M SKY, 90-day stream; the Aug 17 2026 vote cut it to 96.9M; and the Sep 13 2026 vote set the current stream of 143.2M SKY over 90 days, about 1.59M SKY a day. That current rate is the forward figure.

Vesting unlocks: zero. Sky has no team or investor vesting left. The only stream that ever minted SKY — rewards for USDS holders — ended on Jun 2 2025, and the minting contract has no live award.

Foundation and unscheduled unlocks: zero. The treasury is already in the ledger through the staker pay and the buyback. The Sky Frontier Foundation grew its SKY from 0.9M to 37.7M, but every coin came from wallets that were already circulating, and it staked 27.2M of them.

Long-term locked or bankruptcy: zero. No trustee, estate or fixed lock pays out SKY.

MKR to SKY upgrades: zero new supply. Holders of the old MKR token can still upgrade at 24,000 SKY per MKR, less a late-upgrade penalty that rose from 4% to 5% on Sep 13 2026. In 90 days 6,019 MKR were upgraded and received 138.4M SKY, and 6.05M SKY stayed behind as penalty. That SKY was minted long ago and sits in the upgrade contract, which already counts as circulating, so the upgrades move coins inside the float. About 2.06B SKY still waits there for the last 84,141 MKR.

Buy pressure: where new SKY goes

Programmatic buyback: 87.4M SKY.Sky's Smart Burn Engine spends part of the protocol's monthly profit buying SKY on the open market and sends every coin to the treasury. In 90 days it made 1,495 small purchases, spending 5.67M USDS for 87.4M SKY. The pace rose twice: on Aug 17 2026 the trade interval fell from about 3.8 hours to about an hour, and on Sep 13 2026 to about 42 minutes. Since then it buys about 108,600 USDS of SKY a day, which at today's price is about 111.0M SKY over the next 90 days. The plan splits the money 45 to 10: 45 parts buy SKY that is paid back to stakers, 10 parts buy SKY that is burned.

Protocol fee burn: zero on this ledger. On Sep 13 2026 Sky burned 2.86M SKY, the burn share of August buybacks. Those coins had already left the market when the buyback took them into the treasury, so counting the burn again would double-count them. The burn is real — total supply fell by exactly that amount — but it does not shrink the float a second time.

Foundation buy: zero. No foundation or team wallet bought SKY outside the protocol buyback. Outside buyers, such as companies adding SKY to their balance sheet, only move coins between market holders.

New long-term lock: zero. Staked SKY rose by about 166M to 10.31B, but staking has no fixed lock and staked SKY still counts as circulating, so it takes nothing off the market.

Foundation and overhang

The one team-controlled pile outside the float is the Sky treasury, about 38.5M SKYon Oct 3 2026, down from 149.9M on Jul 5 2026 as staker pay outran the buybacks. Its balance is read on-chain every refresh, and its scheduled outflow is already the 143.2M SKY reward stream. Inside the float sit three tracked piles: the upgrade contract's 2.06B SKY reserved for remaining MKR (it can only leave as MKR is upgraded), its 38.2M SKY penalty pool (governance could burn or move it), and the Sky Frontier Foundation's 37.7M SKY. The staking reward contract also holds about 70.6M SKY of unclaimed rewards. If the treasury's balance falls between refreshes by more than the reward stream explains, that outflow enters the foundation row at the next refresh.

How SKY compares to other DeFi revenue tokens

Most DeFi tokens with a buyback do one of two things with the coins: burn them, or park them in a treasury. SKY does both and then pays most of them back out. That makes its supply reading depend less on the buyback size than on the balance between two monthly numbers set by governance — the SKY bought and the SKY paid to stakers. When the treasury had a large reserve to spend, payouts ran far ahead of buybacks and the float grew; with the reserve near 38.5M SKY, the two are being matched, and only the 10-part burn share is a lasting reduction.

Compared with an uncapped proof-of-stake chain that mints fresh coins for validators every epoch, SKY has no running mint at all; its staking yield is funded by real protocol income from the USDS stablecoin. Compared with tokens that simply burn a fee, SKY's burn is small and arrives once a month by vote. And unlike most governance tokens still unlocking team and investor allocations, SKY has no vesting left — its one leftover supply source is the old MKR upgrade, which hands out coins that already count as circulating.

What to watch in the next 90 days

Oct 8 2026: the next monthly vote should burn the 10-part share of September buybacks from the treasury and reset the SKY staking rewards stream from September revenue — the new stream size sets most of the forward sell figure.

The treasury balance: at about 38.5M SKY, a reward stream larger than the buyback can only run a few months before the treasury needs refilling, so watch whether the monthly reset sizes payouts closer to purchases.

The reserve target:Sky's capital reserve was about $92M in September against a $150M target. Once the target is reached, the share of profit going to buybacks and staker rewards is set to rise, which would enlarge both sides of this ledger.

The SKY price:buybacks are set in dollars, so a higher price buys fewer coins. At today's price the buyback covers about 78% of staker pay; a further rise would push the net reading up.

MKR upgrades and the 5% penalty:a further penalty step, or a vote to burn the 38.2M SKY penalty pool, would change the upgrade contract's overhang.

Summary

SKY's supply was roughly steady over the last 90 days: +0.47% on the ledger against +0.50% on the monitor, with +0.14% projected next. Sky mints no new SKY; stakers are paid 143.2M SKY per 90 days from the treasury, and the Smart Burn Engine buys most of it back with protocol revenue. The key risk is the balance between the two monthly settings — a small treasury and a rising price both tilt it toward growth. The ceiling is set by the treasury and the remaining MKR upgrades, not by any mint schedule.

MrNasdog Pressure Framework analysis of SKY, Metric 1 — Inflation. Data + explanation only. Not financial advice. Checked Oct 3 2026.