Sky.money reported more than $4.4 billion in stablecoin liquidity held in its Peg Stability Module on Oct. 9, 2025. The PSM allows one-for-one conversion between USDS, Sky Protocol's dollar-linked token, and USDC. A separate update said about $1.6 billion in cumulative USDC-USDS volume had been processed through Uniswap routing by Oct. 6, following a July 8 integration.
What the PSM actually does
The module is a conversion tool, not a lending desk. At the settings described in the October explanation, the direct PSM leg carries no protocol swap fee and no slippage. That's the pitch: if you're moving between USDS and USDC and you take the direct path, you get one-for-one pricing.
Route it any other way and the math changes. A trade that passes through another token pool before landing in USDC or USDS picks up that pool's own pricing, liquidity conditions, and fees. The direct leg is clean; the scenic route isn't.
Uniswap routing and what the $1.6B counts
Sky said cumulative USDC-USDS volume through Uniswap routing reached roughly $1.6 billion by Oct. 6. The integration went live July 8, so that's about three months of turnover.
One caveat worth stating plainly: cumulative volume includes movement in both directions and repeated conversions. It is not a measure of net USDS issuance, and it does not tell you how many new dollars entered crypto. It measures flow through a pipe, not the size of the tank.
The DAI converter and USDD's parallel setup
A separate Ethereum converter handles DAI and USDS. Sky's developer documentation says the two tokens share an issuance source, and holders can convert between them in either direction without liquidity restrictions.
USDD runs its own version of this machinery. Its vault documentation describes depositing collateral, minting USDD debt, and repaying tokens plus stability fees to release collateral. There's also a migration route from USDDOLD into an equivalent amount of new USDD. Gas costs apply, and there's no deadline on the migration.
USDD's PSM instructions state one-for-one conversion between USDD and supported stablecoins with no service fee, though network gas costs still apply. Users are told to check the displayed quantity of the target token before confirming.
What's still unclear
The $4.4 billion figure is a liquidity snapshot from Oct. 9, and the $1.6 billion is cumulative turnover through Oct. 6. Neither number resolves the more useful question: how much of that USDS is freshly minted versus recycled. Sky hasn't published a breakdown separating the two, and the routing data can't do it either. Anyone watching USDS supply as a proxy for real demand should treat the turnover figure as a flow metric, not a growth metric.
The next concrete checkpoint is whether Sky updates the PSM settings it described in October, or whether the no-fee direct leg stays as-is through the rest of the year.
