How We Built A $300M+ Onchain Business in 2025 - Sky Founder, Rune Christensen

Transcript

Basically, you have to offer the absolute best riskadjusted return or they're going to they're going to jump ship, right? Are these rates adjusted by agents? Is that how they're actually being adjusted? So, this is where as a user, you don't have to think too much about this stuff. You can just you can just uh sit back and the the savings rate that you get from holding USDs is going to be it's going to be the best possible savings rate that the market can source. Welcome back to the Rowup. We are your hosts. I'm Andy. I'm Robbie. And this is your home to learn from the biggest guest, the brightest minds at the tip of innovation. Our goal is to help spread the collective knowledge of everyone in our community. We are breaking crypto out of its echo chamber and taking it to

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[Music] Run. How are you, man? Hey, I'm great. Good to see you, man. Um, lot going on today and um, we got the stable coin super cycle. Man, how are you? Yeah. Yeah, I'm great. Uh, there's so much happening and uh, I think uh, the space is really coming back after um, yeah, just the ups and downs that we always have to deal with in crypto. Yeah, man. I I gotta start this off and just ask what your thoughts are on Circle. Um, did you expect the IPO to come out of the uh out of the gun out of 4x here and trading at over 130?

Um, you know, do you think that the entire industry has has been caught off guard? What what's your take there? Yeah, I mean it's it's it's huge for sure. I mean, it also I I think it makes sense actually in the sense that it's always been clear to me that stable coins are just the most interesting and most powerful use case of crypto. So, I'm not surprised that you have this kind of blue chip uh project just getting massively hyped and and just seeing so much interest and really there's just that type of like I don't know what to call it like sort of Tesla like um FOMO right happening where a lot of people they just want to have some kind of stable coin exposure and of course this is this is great for a

project like Sky which is also offering a stable coin but really like a sort of I guess a much more advanced version of this uh eventually I think a lot of that interest and understanding of why uh not just stable coins but DeFi in general why that is so powerful that's going to really benefit the whole space I think. Yeah man. Yeah. I I keep seeing Vance from uh framework pushing sky when when we see big news from circle and things because it's like the it is the onchain uh you know version of something like like a circle like a tether but just in in a much more defi native way and I think one thing that that you guys have have really kind of pushed for in the

last 12 to 18 months has been this these these uh permanent protocol revenues uh stablecoin payouts uh and really just just trying to create a robust way to grow USDs. Um, you know, and I I remember being at the Sky launch party, I think in Singapore. Um, was it Singapore last year? Um, yeah. Yeah. Yeah. And people were, you know, kind of questioning about the brand and this and that, but now it's clear, right, $8 billion or and growing of of of total stable coin u, you know, supply and and a very very unique flywheel. Um, so I'm, you know, I'm just wondering where we where the kind of revenue and the growth

of USDS is is coming from primarily and where you see a lot of that actual activity coming from, which types of of users uh, and what type of activity uh, have you been seeing for USDS and for Sky? So the thing that's um that's interesting with Sky business model is there's really there is there's USDS SUSDS right which is the savings version of USDS. This is like the new um the kind of the flagship product of sky that was introduced yeah almost a year ago at this point and at this stage uh the I think most of the the demand for this is coming from like

like institutional users like very large scale users um and it's actually quite a different user base than what I would call sort of the OG die user right which is kind of like where the that's where the network effect of sky comes from which is the right like the the original die stable coin uh that we launched with with as maker like 10 years ago at this point which grew to like a a quite a large size and got its own like unique grassroots um like deep DeFi audience and user base but then what happened is that user base is just like there's a kind of a natural limit to the those extremely sort of deep dive like ultra advanced and sort of in the weeds DeFi

users right which a lot of them are really into using die but for for a regular person and for an institution uh as soon as it it doesn't have USD USD in the name basically they get confused right so that was a reason we're kind of branching out and evolving beyond um just like the original iteration of the product with USDS with SUSDS and then with a lot of the new features that are coming with Sky that are just meant to kind of um you know ultimately just finish of the like finish sort of fleshing out uh the concept of a decentralized stable coin managed by a decentralized protocol using governance and using uh advanced and transparent um control mechanisms to just make it the

best possible product for the user. Yeah. And so you mentioned SUSDS and it's now live on optimism and uni chain which I think is kind of collectively getting a a strong uh kind of foothold on this you know defy specific use case chain being uni chain and of course optimism. Um I'm curious I if you see SUSDS and USDS in general being primarily meant for this institutional crowd or you know per perhaps this non you know this this different crowd than just die users if if there's a specific chain ecosystem or uh place where you want to be most active right is it is it uni chain is it optimism is it ethereum

mainet um kind of how are you thinking about the the the evolution of SUSDS with regards to being kind of multi-chain uh and being in a place where the core people that you want to use the the product get the easiest access to it. Sure. I mean I think actually in the end um the fundamental like the most important target user of USDS and SUSDS is actually um like to sort of really uh put it on the edge is actually mercenary capital right it's so it's like institutions and just like this completely um hyperrational uh totally sort of illloyal uh user

right that's just looking for where can I get the best possible risk adjusted return for the next, you know, like couple of blocks, you know, and then I'll I'll I'll rethink it after a couple of blocks and maybe I'll I'll switch to something else, right? And uh so ultimately, I think this is where like this is the type of DeFi and even just general finance user that is going to be the most scalable in the long run. Uh so the entire Sky ecosystem and it's kind of protocol backing uh USDS is fully optimized for this type of of user that is just like basically you have to offer the absolute best risk adjusted return or they're

going to they're going to jump ship right and then the thing is I mean uh if you optimize I mean that's the other thing is like if you optimize your product to cater to the pickiest most sort of hard to please possible user uh then you know it's also going be a really good fit for every other type of user, right? So, in my opinion, like a regular retail uh crypto user that's looking for a good stable coin, there's no reason why they should be left with an inferior product compared to somebody that is using like AI assisted robo advisors or something to get the best possible uh product for them, right? Um, so, uh, that's kind of I mean that's a part of the the the kind of the strategy

and the philosophy around the system is that once you have that once you really the product itself, you've made it as good as it possibly can be. Uh, it's just very well suited to then be spread out to more audiences and and sort of target more demographics. Um, the question is then how do you then actually do that? Uh and in the case of Sky uh all of these questions of like how do you achieve X Y or Z they're always answered by uh the use of the Sky agent framework right so the fact that Sky isn't just it's not just a stable coin protocol it's an entire ecosystem of um these tokenized agents actually that kind of split up in a sense or subdivide the system in system into

different uh areas of interest and sort of areas of focus and then let individual communities um basically specialize in what they think what they believe is is the the kind of the big opportunity for for for basically bringing USDS to market right so even if USDS at its core is optimized for this like hyperrational mercenary capital uh then if somebody thinks well this is going to be a great product for you know financial inclusion in South America they can go and do that and they can be the ones bringing USDS to the South American market. And if they do that, there's actually a way for them to make a really good um profit and and and sustain a solid business model from basically creating that connection

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Yeah. I mean, I I saw you guys uh put out SP Beam about a month ago or so, and this kind of ties into the uh Sky agent framework and and the stars, right? where um you know there's this automated rate automated rate setter per day and you can kind of have these updates to optimize for your holders based on liquidity rates etc. Are these are these um are these rates adjusted by agents? Is that how they're actually being adjusted? Like is an agent analyzing a framework and then being like okay we need to adjust based on a given set of parameters.

So uh all of these components they're still just getting in place. So actually the SP also referred to as the rate setter is like it was implemented yeah like I don't know a couple months ago or something. It has uh not really been fully activated yet in the sense that it's not it's not operational in its kind of final um its final form. And so the reason for that is actually because of the lack of active um star agents as they're called which are like the kind of the the workhorse of the sky ecosystem or these things called the stars which are basically like the business entities that um that yeah that basically focus on different uh like niche u markets or or business strategies and then they in some sense

they kind of compete with each other. They cooperate with each other. They synergize with each other but they also compete in order to for instance uh drive the rates up or down. So basically what happens when you have multiple stars uh like in live operation which is coming really soon I mean that's going to be the case within like at the latest would be two months from now there will be like multiple of these uh actively deploying the collateral backing USDS and then uh like simultaneously cooperating and synergizing while also competing to basically deploy the the collateral in the most efficient possible way. And through that process of the stars basically going out and

trying to generate more profits for themselves by basically better managing the collateral portfolio of USDs, they're going to influence the rates. So let's say that a star like it it um it uh finds a way to deploy into a new type of real world asset, right? New type of like trafi asset that has a really good risk adjust return. So um you can deploy a lot of of um of collateral into it without needing too much of like a risk buffer, right? So so every time a star deploys into something uh it needs to put up like a little bit of of um basically risk capital like it needs to take a little bit of that risk itself and and if something goes wrong the star takes the loss first before anything

before Sky starts to be at risk of taking losses and even USDS holders, right? And so if a star then finds an opportunity that gives a pretty good yield and doesn't require too much of this extra risk on top then it can start to really like borrow large scale uh out of sky right uh and then deploy into this new asset and then the thing is what's going to happen is as you as this star like generates more and more USDS and basically increases the supply of USDS in the market if you don't have enough buyers of this new USDS right because there has to be a user somewhere that actually wants to hold it um then the system will just automatically use the rate setter to increase the rates.

And so this way as Sky is basically able to automatically through this decentralized process that relies on multiple stars competing with each other as Sky gets access to better risk adjusted return out in the marketplace. It will naturally offer a better risk adjusted return to it users. So this is where as a user you don't have to think too much about this stuff. you can just you can just uh sit back and the the savings rate that you get from holding USDs is going to be it's going to be the best possible savings rate that the market can source and also it's going to always be um properly risk adjusted right so so the risk doesn't change like even if the rate goes up that doesn't mean that now suddenly there's bigger risk of everything exploding uh if if

the if the rate goes up that's because an actual better risk adjusted return has been found of course this is not like I mean this is all managed by Sky Core uh implementing uh quite advanced um uh risk management frameworks and of course today I mean they're still relatively new uh they're actually based on uh banking regulation right so they're based on what's called Barcel which is roughly how banks themselves are are regulated but just you know more efficient and not so uh you know real time and and just doesn't have all the drawbacks that Trifi has But fundamentally, it's like a it's a conservative classic approach to how do you manage risk when when you're trying

to, you know, prioritize that users should not be at risk of losing the money. Like that, that is just 1,000% the most important objective, right? And then once you have made completely sure that people aren't going to be losing the money, then you can start to deploy into interesting opportunities and figure out how to generate this uh very attractive riskadjusted return. Yeah. And and I think one of the one of the best parts about the mechanism which you've designed to build USDS and then obviously this core focus on the security parameters is around what what kind of got us all excited about DeFi outside of the you know the openness and the permissionlessness and the censorship resistance and and and the

key ideas is this idea to kind of like stack these things on top of each other and build different yield opportunities or different uh kind of protocol relationships um together. And so when you're looking out into the DeFi landscape today, what are some of the the the projects which you've been most impressed with with regards to their ability to compose well with others? Um, you know, or or even uh compose within Sky and USDS. Uh I don't I mean I think the really big ones is like um you know, ABA, Athena, Moro.

Uh there's also like I mean there's there's something there like Maple uh Fluid or some and Pendle like these are all examples of these like OG well-established D5 protocols that uh USDS holders are now uh you know basically able to tap into just by holding SUSDS. Uh and this is all managed through Spark the first star, right? So Sky just basically delegates um control of the collateral of I mean or rather a big portion of the collateral portfolio is delegated to Spark and then Spark is is taking care of uh interoperating with all these various DeFi protocols out there and then actually I mean because

of the magic of DeFi because of money legos because of interoperability it's possible for Spark to actually safely do this without getting stuck in the kind Dow process hell that is usually what ends up happening in this kind of situation, right? Because you have these sort of several layers where like Sky is using its own sort of governance uh cycles to just build the overall framework and then basically say look this is what the overall framework looks like. you can sort of play around within that but you can't break these rules right you can't take more risk than the framework allows you to take but sky doesn't like prescribe or really understand how to then make a good business uh once you are sort of um you know as long as as long as you're not

creating tail risk doesn't really care beyond that and just it's just it's a hard problem to figure out how to be make a profitable business out of this but then in Spark you have a a team and you have people that are you know very focused on this question then right of like okay once I once I know that whatever I do it's within the sort of the safety parameters of of of the risk framework now my number one priority is generating profits right like um tapping into new opportunities and moving really fast so you get this kind of like the best of both worlds where you have a secure framework keeping people's money safe but you have stars that are able to then actually be innovative and move fast and generate good profits and sustain their business models

And then it gets even better when you get multiple of them, right? Then you get a really really dynamic free market, right? Where you have multiple stars. They'll be competing with each other. They'll be learning from each other. And they'll also be synergizing and sort of sharing like sharing the total scale of the whole ecosystem. So I think it's going to be really really exciting to see how uh Sky is going to be everywhere, right? It's really through the stars. It's going to be tapping into every single um interesting every single value creating protocol out there. Yeah, everyone. One last one for you. As we sit here today, I believe stable coin total supply or market cap is around 250 to 60 billion. Um, with the with what I would believe to be the road to 1.5

trillion uh over the next 18 months to two years, how do you how do you see that kind of race playing out? or maybe better asked what is your plan for for USDS and Sky to capture a large part of that growth in the coming two years. So at this stage uh the entire strategy is to focus on evolving the ecosystem of stars right and really promote the builders that that are growing these stars. Um, so I think it's kind of I mean I would say I would argue like it's kind of like a it's a sort of exponential bet in the sense that if the star ecosystem really takes off and the amount of you could

say decentralized institutionalized knowledge that exists in uh the star ecosystem, right? So whenever somebody comes and they create a new star, it's super easy for them because they can copy all of the knowledge and all of the learnings from all the prior stars, right? And not to mention the technology, right, which is maybe the most important part that you have this like huge ready to go uh ultra seccure DeFi technology stack, right? That you can just use right out the gate that gives you gives you leverage. It gives you governance. Uh it gives you like um access to a huge contributor ecosystem of of with sort of a reputation and vetting and uh and and and kind of feedback mechanisms for how to how to get things done and how to pay

contributors fairly to do work for you. Um and so yeah, if that takes off, then like I said, I mean the ultimate customer of stable coins is the hyperrational capital. Yeah. Um because the same thing that Sky is doing and the stars are doing, right, which is we are kind of it's like an it's like an AI arms race, right? like everybody that's deploying uh money, I mean actually most are probably still just busy doing paperwork, but increasingly uh it's clear that if you want to have a chance at actually delivering a competitive risk adjusted return for your customers, you have to deploy you know um increasingly sophisticated

uh you know datadriven AI models and and just like automated solutions to this, right? Um, and uh, but but it it also works on the other side. I mean that the users themselves, they also have they also have access to tools that basically help them how to get the best possible risk adjusted return. So over time, that's what I'm basically expecting that even a completely random person that's used some like phone wallet to manage the money, that phone wallet is going to have some like halfdeent open source AI. Yeah. Right. that's gonna help them not pick a stable coin that takes a 1% cut.

It's going to pick the stable coin that gives them, you know, a really strong free market driven yield like SUSDs does, right? And then also that takes an extremely low spread, right? So that's the other thing with Sky that it sort of knows right out of the gate. It's not a good idea to try to take a big cut from the customer, right? You got to take got to get used to taking a very thin slice. Run, I appreciate your time. Thanks for joining today. um ve very very impressed from the day one of of being active in in DeFi on my side in late 2019 into early 2020 and being a part of that kind of crowd and then all the way up till now. So uh really appreciate your time uh and looking forward to watching USDS grow alongside Sky as the stable coin

expansion continues. I think this sector is is one of the hottest now for good reason. So excited to kind of see this continue to play out. Thanks for having me. Thanks R.