# Spark approves removing USDC, USDT, and PYUSD reserve caps

> The approved configuration would remove explicit reserve-level exposure ceilings for the three stablecoins once implemented.

- URL: https://riadefi.com/on-chain/2025-10-23-sky-lending-sparklend-stablecoin-cap-removal/
- Type: Economic change
- Stage: Approved, not executed
- Evidence: confirmed
- Materiality: material
- Event date: 2025-10-23
- Version: 1, published 2026-08-22 (first published 2026-08-22)
- Advisor-relevant: no
- Affects: Sky (protocol); SparkLend (protocol)

## What happened

Spark governance approved removing supply-cap and borrow-cap automation and setting the USDC, USDT, and PYUSD supply and borrow caps to zero on Ethereum SparkLend.

## What changed

The approved configuration would remove explicit reserve-level exposure ceilings for the three stablecoins once implemented.

## What did not change

On-chain execution was not established by the retained record. The three assets remained non-collateral under the proposal, and approval did not reopen Ketju's rejected SparkLend memo.

## Confirmed

- The official Spark vote concluded with the For option prevailing.
- USDC, USDT, and PYUSD were the only reserves covered.
- The approved specification sets each reserve's supply cap and borrow cap to zero, meaning no cap.
- The proposal states that the assets are not usable as collateral.

## Still open

- The implementation transaction and effective on-chain parameters.
- Post-implementation utilization, concentration, available liquidity, and any replacement exposure controls.

## What it means for an advisor

- Review the Sky dependency map because uncapped SparkLend reserves can change balance-sheet concentration and liquidity behavior.
- Keep SparkLend allocation at zero unless its asset-specific reopen criteria are independently satisfied, including live exit and utilization tests.

## Sources

1. [[Ethereum] SparkLend - Remove Supply and Borrow Caps for Non Collateral Stablecoins (USDC, USDT, PYUSD)](https://snapshot.org/#/sparkfi.eth/proposal/0xeea0e2648f55df4e57f8717831a5949f2a35852e32aa0f98a7e16e7ed56268a8) · Spark governance · 2025-10-20


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Published by Ketju Research on RIADeFi (https://riadefi.com). Educational research for financial professionals; not investment, legal, tax, or compliance advice.