The master database is used for the spt_values table and two-phase commits. The database is automatically created on the master device by the configuration utility.
Because this database may have a lot of activity and use a lot of log space, Sybase strongly recommends that you either create sybsystemdb on another device before you upgrade or that you move it to another device after you upgrade. This protects the master device in case the sybsystemdb log fills up.
If you do not plan on using the features that require sybsystemdb, you can keep it at the minimum size.