# Spark proposes larger backstop and liability-adjusted buyback accounting

> The backstop input would rise from 1 million to 5 million USDS. Monthly valuation would occur on the first day, with subsequent buyback transfers purchased through a 90-day TWAP.

- URL: https://riadefi.com/on-chain/2026-09-11-spark-saep-23-proxy-reserve-accounting/
- Type: Economic change
- Stage: Proposed
- Evidence: confirmed
- Materiality: watch
- Event date: 2026-09-11
- Version: 1, published 2026-09-15 (first published 2026-09-15)
- Follow-up: 2026-09-18
- Advisor-relevant: no
- Affects: Sky (protocol); Spark Liquidity Layer (protocol)

## What happened

Phoenix Labs proposed increasing Spark's product backstop and deducting accrued, unwithdrawn Spark Savings yield liabilities before calculating excess proxy capital.

## What changed

The backstop input would rise from 1 million to 5 million USDS. Monthly valuation would occur on the first day, with subsequent buyback transfers purchased through a 90-day TWAP.

## What did not change

The proposal does not prove adoption, capitalization or executed buybacks. Existing risk-capital and operational-reserve obligations remain.

## Confirmed

- SAEP-23 specifies both the backstop increase and the accrued-liability deduction.
- The proposed valuation time is 16:00 UTC on the first day of each month.
- The proposal preserves existing buyback rates and requires subsequent governance processing.

## Still open

- Approval and effective policy date.
- Liability measurement quality and the resulting reduction in distributable capital.
- Custody and execution controls during overlapping 90-day buyback programs.

## What it means for an advisor

- Monitor reserve adequacy and liability recognition in the Sky/Spark diligence files.
- Do not treat the proposed backstop increase as funded protection or a guarantee of depositor recovery.

## Sources

1. [SAEP-23: Update SubDAO Proxy Management Artifact Section](https://forum.skyeco.com/t/saep-23-update-subdao-proxy-management-artifact-section/28235) · Spark governance / Phoenix Labs · 2026-09-11


---

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