Sky Advisor Proposes Halting New Core Vault Borrowing

BA Labs has proposed halting new borrowing in Sky’s core vaults, citing 771 open vaults carrying 376.33 million USDS in debt. Existing borrowers would retain the ability to repay and manage collateral, but no additional USDS could be minted against those positions. The move signals a risk-containment stance at the protocol as it seeks to cap exposure in its core lending engine. It matters because Sky’s USDS supply and collateral-backed credit are central to its stablecoin model, and a borrowing freeze could slow supply growth if extended. What to watch next is whether Sky governance adopts the recommendation and how the pause affects USDS issuance and vault activity.