The Governance Facilitators, Sidestream, and Dewiz have placed an executive proposal into the voting system. MKR/SKY Holders should vote for this proposal if they support the following alterations to the Sky Protocol.

If you are new to voting in the Sky Protocol, please see the voting guide to learn how voting works.

---

Executive Summary

If this executive proposal passes, the following actions will occur within the Sky Protocol:

• Stability Fees for multiple vaults and the Savings Rates (DSR and SSR) will be adjusted.
• The Arbitrum Token Bridge will be initialized as described below
• Part of the Smart Burn Engine’s LP-held tokens will be unwound to the Pause Proxy as described below.
• Smart Burn Engine parameters will be changed as described below.
• The ALLOCATOR-SPARK-A DC-IAM Parameter will be adjusted as described below.
• Two Standby Spell keys will be updated and two Standyby Spells will be added in the Chainlog.
• A total of 20,387 USDS will be distributed to six Aligned Delegates as compensation for January 2025.
• A total of 102,436 USDS and 988,000 SKY will be transferred to two Atlas Core Development contributors.
• A total of 3 million USDS for Integration Boost funding will be transferred to 0xD6891d1DFFDA6B0B1aF3524018a1eE2E608785F7.
• A Spark proxy spell will be executed.

Voting for this executive proposal will place your MKR/SKY in support of the actions outlined above.

Unless otherwise noted, the actions listed above are subject to the GSM Pause Delay. This means that if this executive proposal passes, the changes and additions listed above will only become active in the Sky Protocol after the GSM Pause Delay has expired. The GSM Pause Delay is currently set to 30 hours.

This executive proposal includes an office-hours modifier that means that it can only be executed between 14:00 and 21:00 UTC, Monday - Friday.

If this executive proposal does not pass within 30 days, then it will expire and can no longer have any effect on the Sky Protocol.

---

Proposal Details

Stability Fee Adjustments

• Authorization: Ecosystem Authorization
• Proposal: Forum Post

If this executive proposal passes, then the Stability Fees (SF) for the vault types listed below will be adjusted as follows:

• Reduce ETH-A SF by 2.00 percentage points from 9.75% to 7.75%.
• Reduce ETH-B SF by 2.00 percentage points from 10.25% to 8.25%.
• Reduce ETH-C SF by 2.00 percentage points from 9.50% to 7.50%.
• Reduce WSTETH-A SF by 2.00 percentage points from 10.75% to 8.75%.
• Reduce WSTETH-B SF by 2.00 percentage points from 10.50% to 8.50%.
• Reduce WBTC-A SF by 1.50 percentage points from 14.25% to 12.75%.
• Reduce WBTC-B SF by 1.50 percentage points from 14.75% to 13.25%.
• Reduce WBTC-C SF by 1.50 percentage points from 14.00% to 12.50%.
• Increase ALLOCATOR-SPARK-A SF by 1.89 percentage points from 1.33% to 3.22%.

Savings Rate Reductions

• Authorization: Ecosystem Authorization
• Proposal: Forum Post

If this executive proposal passes, then the DAI Savings Rate (DSR) and the SKY Savings Rate (SSR) will be decreased as follows:

• Reduce DSR by 2.50 percentage points from 7.25% to 4.75%.
• Reduce SSR by 2.25 percentage points from 8.75% to 6.50%.

Arbitrum Token Bridge Initialization

• Authorization: Ecosystem Authorization, Governance Poll 1194
• Proposal: Forum Post

If this executive proposal passes, then the Arbitrum Token Bridge will be initialized by calling TokenGatewayInit.initGateways using the following parameters:

• l1GatewayInstance.gateway: (ERC1967Proxy: 0x84b9700E28B23F873b82c1BEb23d86C091b6079E)
• l1GatewayInstance.gatewayImp: (L1TokenGateway: 0x12eDe82637d5507026D4CDb3515B4b022Ed157b1)
• l2GatewayInstance.gateway: (ERC1967Proxy: 0x13F7F24CA959359a4D710D32c715D4bce273C793)
• l2GatewayInstance.gatewayImp: (L2TokenGateway: 0xD404eD36D6976BdCad8ABbcCC9F09ef07e33A9A8)
• l2GatewayInstance.spell: (L2TokenGatewaySpell: 0x3D4357c3944F7A5b6a0B5b67B36588BA45D3f49D)
• cfg.l1Router: (L1GatewayRouter (ERC1967Proxy): 0x72Ce9c846789fdB6fC1f34aC4AD25Dd9ef7031ef)
• cfg.inbox: (Inbox(ERC1967Proxy): 0x4Dbd4fc535Ac27206064B68FfCf827b0A60BAB3f)
• cfg.l1Tokens: (array [USDS, SUSDS])
• cfg.l2Tokens: (array [Usds(ERC1967Proxy): 0x6491c05A82219b8D1479057361ff1654749b876b, SUsds(ERC1967Proxy): 0xdDb46999F8891663a8F2828d25298f70416d7610])
• cfg.maxWithdraws: (array [type(uint256).max, type(uint256).max])
• cfg.xchainMsg.maxGas: 350000
• cfg.xchainMsg.gasPriceBid: 100000000
• cfg.xchainMsg.maxSubmissionCost: 1316000000000000

Smart Burn Engine Liquidity Unwind

• Authorization: Ecosystem Authorization
• Proposal: Forum Post

If this executive proposal passes, then part of the Smart Burn Engine’s LP-held tokens will be unwound to the Pause Proxy by executing the following actions:

• The withdraw function in the UniV2PoolWithdraw script will be invoked.
• 15 million USDS worth of protocol-owned LP tokens will remain in the SBE (7.5 million USDS & the equivalent amount in SKY).
• The recovered SKY tokens will be sent to (and remain in) the Pause Proxy.
• The USDS portion will subsequently be transferred from the Pause Proxy to the Surplus Buffer.

Smart Burn Engine Parameter Changes

• Authorization: Ecosystem Authorization
• Proposal: Forum Post

If this executive proposal passes, then the Smart Burn Engine parameters below will be changed as follows:

• MCD Vow:
  • hump (trigger for surplus auctions once exceeded): 70 million DAI
  • bump (the lot size allocated per operation): 10,000 DAI
• Splitter:
  • burn: 100% (All surplus will be directed to burning)
  • hop (minimum interval between consecutive kick operations): 876 seconds

ALLOCATOR-SPARK-A DC-IAM Parameter Changes

• Authorization: Ecosystem Authorization, Governance Poll 1193
• Proposal: Forum Post

If this executive proposal passes, then the ALLOCATOR-SPARK-A DC-IAM parameters below will be changed as follows:

• Increase DC-IAM Target Available Debt (gap) by 400 million USDS from 100 million USDS to 500 million USDS.
• Increase DC-IAM Maximum Debt Ceiling (line) by 4 billion USDS from 1 billion USDS to 5 billion USDS.
• The Ceiling Increase Cooldown (ttl) will remain unchanged at 24 hours.

Standby Spell Chainlog Changes

• Authorization: Governance Poll 1196
• Proposal: Forum Post

If this executive proposal passes, then the Chainlog keys below will be updated as follows:

• Update the value of Standby Spell key EMSP_CLIP_BREAKER_FAB to 0x867852d30bb3cb1411fb4e404fae28ef742b1023
• Update the value of Standby Spell key EMSP_LINE_WIPE_FAB to 0x8646f8778b58a0df118facedf522181ba7277529
• Add Standby Spell:
  • key: EMSP_LITE_PSM_HALT_FAB
  • value: 0xB261b73698F6dBC03cB1E998A3176bdD81C3514A
• Add Standby Spell:
  • key: EMSP_SPLITTER_STOP
  • value: 0x12531afC02aC18a9597Cfe8a889b7B948243a60b

Aligned Delegate Compensation for January 2025

• Authorization: Atlas A.1.5.8
• Proposal: Forum Post

If this executive proposal passes, then a total of 20,387 USDS will be distributed to six Aligned Delegates as compensation for January 2025:

Delegate	Amount (USDS)	Address
BLUE	4,000 USDS	0xb6C09680D822F162449cdFB8248a7D3FC26Ec9Bf
Bonapublica	4,000 USDS	0x167c1a762B08D7e78dbF8f24e5C3f1Ab415021D3
Byteron	4,000 USDS	0xc2982e72D060cab2387Dba96b846acb8c96EfF66
Cloaky	4,000 USDS	0x9244F47D70587Fa2329B89B6f503022b63Ad54A5
JuliaChang	4,000 USDS	0x252abAEe2F4f4b8D39E5F12b163eDFb7fac7AED7
PBG	387 USDS	0x8D4df847dB7FfE0B46AF084fE031F7691C6478c2

Atlas Core Development Payments

• Authorization: Ecosystem Authorization, Atlas Axis Authorization
• Proposal: Forum Post

If this executive proposal passes, then a total of 102,436 USDS and 988,000 SKY will be transferred to two Atlas Core Development contributors and their teams:

USDS Token Transfers

Contributor	USDS Amount	Address
BLUE	83,601 USDS	0xb6C09680D822F162449cdFB8248a7D3FC26Ec9Bf
Cloaky	18,835 USDS	0x9244F47D70587Fa2329B89B6f503022b63Ad54A5

SKY Token Transfers

Contributor	SKY Amount	Address
BLUE	550,000 SKY	0xb6C09680D822F162449cdFB8248a7D3FC26Ec9Bf
Cloaky	438,000 SKY	0x9244F47D70587Fa2329B89B6f503022b63Ad54A5

Integration Boost Funding

• Authorization: Atlas A.5.2.1.2
• Proposal: Forum Post

If this executive proposal passes, then 3 million USDS will be transferred to 0xD6891d1DFFDA6B0B1aF3524018a1eE2E608785F7 to continue funding the Integration Boost initiative.

Spark Proxy Spell

• Authorization: Ecosystem Authorization 1, Ecosystem Authorization 2, Governance Polls 1190, 1191, 1192, 1194, 1195
• Proposal: Forum Post 1, Forum Post 2

If this executive proposal passes, then a Spark Proxy Spell will be executed at 0x9EAa8d72BD731BE8eD71D768a912F6832492071e with the following contents.

[Mainnet and Base] Mint $100M USDS Worth of sUSDS into Base

Minting an additional 100 million USDS worth of sUSDS to Base.

[Mainnet] Increase weETH Supply Cap Parameters

• Increase the weETH Supply Cap Target Available Exposure (gap) by 5,000 weETH from 5,000 weETH to 10,000 weETH.
• Increase the weETH Supply Cap Maximum Absolute Exposure (max) by 300,000 weETH from 200,000 weETH to 500,000 weETH.

[Base] Increase PSM3 Rate Limits

Changing the PSM3 rate limits on Base as follows:

• Increase the USDC deposit rate limits from 4 million max, 2 million/day slope to 50 million max, 50 million/day slope.
• Increase the USDC withdrawal rate limits from 7 million max, 2 million/day slope to 50 million max, 50 million/day slope.
• Increase the USDS deposit rate limits from 5 million max, 2 million/day slope to Unlimited.
• Increase the sUSDS deposit rate limits from 8 million max, 2 million/day slope to Unlimited.

[Mainnet] Whitelist sUSDS for Deposit/Withdrawal

Whitelisting sUSDS Deposit/Withdraw as follows:

• sUSDS Deposit: Unlimited
• sUSDS Withdraw: Unlimited

Arbitrum Activation

Onboarding Arbitrum One to the Spark Liquidity Layer with the following addresses and parameters:

Addresses

• Spark Governance: 0x65d946e533748A998B1f0E430803e39A6388f7a1.
• PSM3: 0x2B05F8e1cACC6974fD79A673a341Fe1f58d27266.
• SSR Oracle: 0xEE2816c1E1eed14d444552654Ed3027abC033A36.
• ALM Controller: 0x77e11453a99a7770b04f7921FfccD3eE9761ba6c.
• ALM Proxy: 0x92afd6F2385a90e44da3a8B60fe36f6cBe1D8709.
• ALM Rate Limits: 0x19D08879851FB54C2dCc4bb32b5a1EA5E9Ad6838.
• Freezer: 0x90D8c80C028B4C09C0d8dcAab9bbB057F0513431.
• Relayer: 0x8a25A24EDE9482C4Fc0738F99611BE58F1c839AB.

Initial Rate Limits

• CCTP Global: Unlimited
• CCTP from Arbitrum to Ethereum: 50 million max, 25 million / day slope
• CCTP from Ethereum to Arbitrum: 50 million max, 25 million / day slope (Rate Limit on Ethereum)
• USDC Deposit: 50 million max, 50 million / day slope
• USDC Withdraw: 50 million max, 50 million / day slope
• USDS Deposit: Unlimited
• USDS Withdraw: Unlimited
• sUSDS Deposit: Unlimited
• sUSDS Withdraw: Unlimited

Initial Mint

Minting an initial 100 million USDS and 100 million USDS worth of sUSDS to Arbitrum One.

Review

Community debate on these topics can be found on the Sky Governance forum. Please review any linked threads to inform your position before voting.

---

Resources

Additional information about the Governance process can be found in the Operational Manual.

To add current and upcoming votes to your calendar, please see the Sky Governance Calendar.