# Phoenix Labs proposed sending 100 million sUSDS to Arbitrum and changing SparkLend rates

> The proposal would refill PSM3 inventory on Arbitrum through an administrative bridge transfer that sits outside the controller's rate limits. It would also change some lending rate curves.

- URL: https://riadefi.com/on-chain/2026-10-09-spark-spell/
- Type: Economic change
- Stage: Proposed
- Evidence: confirmed
- Materiality: material
- Event date: 2026-10-09
- Version: 1, published 2026-10-10 (first published 2026-10-10)
- Follow-up: 2026-10-16
- Advisor-relevant: no
- Affects: Sky (protocol); SparkLend (protocol); Spark Liquidity Layer (protocol)

## What happened

Phoenix Labs proposed an Oct. 22 spell that would transfer 100 million sUSDS shares to Arbitrum, lower the SparkLend WETH slope2 and revise the PYUSD, RLUSD and USDG rate models.

## What changed

The proposal would refill PSM3 inventory on Arbitrum through an administrative bridge transfer that sits outside the controller's rate limits. It would also change some lending rate curves.

## What did not change

The source does not show that Sky approved or executed any transfer. It does not show that the PSM ran out of inventory, that redemptions were impaired or that new USDS was minted. Ketju still does not approve SparkLend or the Spark Liquidity Layer.

## Confirmed

- The proposed bridge amount is 100 million sUSDS shares.
- The proposal grants and revokes an ALM Proxy CONTROLLER role within the transfer call, so that transfer sits outside the controller's rate limits.
- The proposal would cut WETH slope2 from 75% to 30% and keep the kink at 90% utilization.
- The proposed common stablecoin model has an 80% kink, a base rate of SSR plus 0.20%, a slope1 of 0.20% and a slope2 of 15%.
- The transfer needs an SPK poll from Oct. 12 to 15, and the executive vote is planned for Oct. 22.

## Still open

- Poll approval, confirmation from the risk advisor, verified deployment of the new strategies and execution of the executive are all pending.
- Ketju has not reproduced the source's inventory readings and depletion estimates, and they do not show that any withdrawal failed.
- After any execution, Ketju must check that the retryable ticket settled and that the relayer then deposited into PSM3.

## What it means for an advisor

- Ketju will review the Sky and Spark liquidity files for the proposed cross-chain inventory, the administrative transfer and what settlement depends on.
- Ketju will review the affected lending-rate assumptions and verify the new strategies before treating the changes as live.
- Ketju keeps its current eligibility decisions until the existing questions on authority and access are answered.

## Sources

1. [[October 22, 2026] Proposed Changes to Spark for Upcoming Spell](https://forum.skyeco.com/t/october-22-2026-proposed-changes-to-spark-for-upcoming-spell/28298) · Phoenix Labs · 2026-10-09


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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.