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The Stability Scope governs the management of the USDS Stablecoin. The USDS Stablecoin must be a permissionless and useful currency available to anyone. Its stability and risk must be managed to generate as much value for Sky and public good as possible.
This Article defines rules pertaining to Sky’s Collateral Portfolio, which consists of several different assets to ensure liquidity.
This Section governs the management of Sky’s Collateral Portfolio.
A Peg Stability Module (”PSM”) allows users to swap a given collateral type directly for Dai or USDS at a fixed rate, rather than borrowing Dai or USDS. The PSM contract was designed with Stablecoin collateral in mind, allowing users to swap other Stablecoins for Dai or USDS at a fixed rate to aid with keeping Dai or USDS pegged to one (1) USD.A PSM operates similarly to a regular vault type with a zero Stability Fee and a liquidation ratio of 100% that can only be accessed through a user-facing smart contract containing the relevant swap functions. Unlike regular vaults, users of the PSM do not retain ownership of the asset and borrow Dai or USDS. Instead, PSM users swap the asset directly for Dai or USDS.
All other Peg Stability Modules must be offboarded when the migration to the Lite PSM is complete. This will be coordinated by the Stability Facilitators in consultation with the Stability Scope Advisors. The subdocuments herein specify the terms of legacy Peg Stability Modules. These documents become obsolete when the respective Peg Stability Modules have been offboarded.
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Whenever the total amount of USDC in the Peg Stability Module (”PSM”) plus the total amount of USDC in GUNI pools falls below 400 million, USDC must be transferred from Coinbase Custody to the PSM to bring the total amount of USDC in the PSM, plus the total amount of USDC in the GUNI pools, to 550m USDC. Whenever the total amount of USDC in the PSM, plus the total amount of USDC in GUNI pools exceeds 700 million, USDC must be transferred from the PSM to Coinbase Custody to bring the total amount of USDC in the PSM, plus the total amount of USDC in the GUNI pools, to 550m USDC. This mechanism can be fully replaced with an upgraded PSM that makes the Coinbase Custody solution obsolete. The Stability Facilitators can directly trigger an Executive Vote to implement an upgraded PSM.