Spark

Spark is an on-chain asset allocator and yield infrastructure layer that provides savings products (Spark Savings Vaults) and a lending protocol (SparkLend). It deploys capital across DeFi, CeFi, and RWAs to generate yield, offering users access to risk-adjusted returns on stablecoins and ETH through tokenized vaults.

Spark works as a two-sided system that moves money around to generate returns.

On one side, it borrows from Sky's stablecoin reserves and sends that capital out across three broad areas: other DeFi apps, centralized finance (CeFi), and real-world assets (RWAs). This movement is handled by the Spark Liquidity Layer (SLL) — automated plumbing that places funds into lending markets (SparkLend, Aave, Morpho) and exchange pools (Curve) on networks like Ethereum, Base, Arbitrum, Optimism, and Unichain.

The yield comes from three sources: interest paid by borrowers, fees collected from the protocols Spark uses, and returns from real-world assets.

On the other side, Spark packages that yield into Savings Vaults — tokenized buckets you can put money into. These are spUSDC, spUSDT, spETH, and spPYUSD. For the USD vaults, the Sky Savings Rate acts as a guaranteed minimum return; any extra yield from DeFi strategies is added on top. For the ETH vault, the rate adjusts based on market conditions.

To keep things practical, the Spark Liquidity Layer holds 10% of each vault in instantly accessible form. For larger withdrawals, it can tap into Sky's balance sheet. Governance (the people who run the protocol) sets the rates and risk limits. Ultimately, the yield you receive is funded by borrowing fees from Sky Protocol plus the returns from all the strategies Spark deploys across DeFi, CeFi, and RWAs.