Sky Governance's proposal aims to double the USDC PSM buffer to $800 million

TL;DR

BA Labs proposed doubling the key parameters of LITE-PSM-USDC-A in Sky stablecoin system from 400 million to 800 million.
The proposal puts USDC reserves at 4.13 billion, an escalate of 108% since the last recalibration in October 2024.
According to the forum post, the change would escalate the daily refresh capacity to 1.6 billion and the total handling capacity to 2.4 billion.
The update has been approved by the core coordinators team ahead of an upcoming executive vote, but still requires formal approval before publication.

Sky management is considering significantly increasing the parameters of its LITE-PSM-USDC-A module, which would expand the system’s ability to handle huge flows of USDC-pegged stablecoins.

In a forum post on June 11, BA Labs, in its role as risk advisor to the General Board, proposed increasing both the pre-set DAI buffer and the DC-IAM gap parameter from 400 million to 800 million. The proposal describes LITE-PSM-USDC-A as the dominant USDC-DAI trading system on the Sky stablecoin system.

Sky’s proposal aims for greater stablecoin throughput

The Peg Stability Module is a key component of a stablecoin installation. In brief, it helps absorb conversion flows between USDC and DAI or related Sky ecosystem resources, allowing the system to meet demand without causing unnecessary stress during periods of high activity.

BA Labs reported that USDC reserves currently stand at 4.13 billion. This is more than double the level recorded during the last recalibration on October 7, 2024, with the proposal citing a 108% escalate in reserves since then.

The recommended parameter change would double the buffer and gap to 800 million. According to the post, this would escalate the daily refresh capacity to 1.6 billion per day and the serving capacity to 2.4 billion.

Why buffer matters

Large stablecoin systems may experience sudden flows as users switch assets, exploit liquidity, or react to market stress. If the module capacity is too petite for the user’s demand, the system may require more repeated parameter adjustments or face lower liquidity conditions on busy conversion days.

The proposal points to several major historical events. The heaviest single SellGem day cited by BA Labs consumed 1.75 billion DAI on May 18, 2026. Other large days included 1.60 billion on June 20, 2025, 1.41 billion on October 21, 2025, 1.41 billion on March 5, 2026, and 1.31 billion on January 13, 2026.

These figures explain why the proposed buffer is not just a technical management detail. In a stablecoin system with billions of dollars in reserves, parameter limits can directly impact the smoothness of huge flows through the protocol.

Still awaiting formal approval

The motion notes that the lead coordinator’s panel has approved this change for inclusion on the upcoming June 12 executive vote. This means that the update has progressed procedurally but has not yet become an lively protocol policy.

For DeFi users, the crucial distinction is that this is a proposed risk and liquidity adjustment, not a change that has already been made. If approved in an executive vote, the higher limits will give Sky’s system more room to handle huge flows of USDC conversions without having to repeat manual recalibrations.

The move also highlights how stablecoin management is increasingly focusing on very large-scale liquidity operations. As reserves grow, parameters that once seemed sufficient may become too petite relative to the actual transaction patterns in the system.

For Sky, the question now is whether management agrees that doubling the LITE-PSM-USDC-A buffer is the appropriate response to this growth.