Sky completed its first permanent SKY token burn, removing 2.86 million tokens bought on the open market with 5% of its monthly Net Protocol Surplus. The transaction is part of Sky's Stage 2 capital allocation framework, which directs 50% of monthly Net Protocol Surplus to SKY- and USDS-related rewards and token purchases. Of that allocation, 22.5% funds SKY purchases for SKY staking rewards, 22.5% supports USDS staking rewards, and 5% is used to buy and burn SKY. Sky said the first burn establishes a mechanism linking the protocol's financial performance to a reduction in SKY's supply.