Why a DeFi platform ditched its consumer app to become the secret backend for tech giants
Revenue fell from $80 million to $20 million in the bear market. OTC lending at $260 million outstanding is the fastest-growing line, targeting $1 billion by year-end.
The stablecoin market is fragmenting, and a lending and liquidity unit of Sky, called Spark, is positioned to capitalize on the split. Sky, formerly known as MakerDAO, issues the USDS stablecoin. Fintechs, exchanges, and banking groups are launching their own dollar-linked tokens to keep users, reserves, and transaction activity within their own networks due to increasing competition.
Notable stablecoins include PayPal's PYUSD, Circle's USDC, Tether's USDT, Robinhood's USDG, and OpenUSD's OUSD, among hundreds of others like Ethena's USDe, World Liberty Financial's USD1, and Sky's USDS.
Spark aims to be the layer that connects these networks by moving money between them. Its stablecoin FX layer, on Uniswap, helps institutions switch between stablecoins by concentrating liquidity in yield-bearing pools. Spark migrated $150 million into Uniswap v4 pools pairing USDS against USDT and PYUSD, accounting for about 30% of stablecoin-to-stablecoin swap volume on Uniswap and routing roughly $1.5 billion in its first 30 days.
Spark has also formed infrastructure deals directly with issuers, such as PayPal's collaboration to boost PYUSD liquidity. The firm believes that payments will drive fragmentation to volume, with the GENIUS Act and Clarity Act potentially leading to $3 trillion in onchain payments by 2030. To avoid direct competition with Coinbase, PayPal, and Robinhood for distribution, Spark shelved a consumer-facing app late last year, focusing instead on providing yield and liquidity to apps consumers already use.
This B2B or B2B2C model has proven successful, as seen with Robinhood's Earn product, which has drawn over $200 million in deposits in just 24 days.
Spark also engages in direct institutional lending, with over $260 million in outstanding balance through Anchorage-backed Bitcoin loans and a target of $1 billion by year-end. The firm's Spark Prime hybrid prime brokerage, holding about $20 million in outstanding loans, remains in a deliberate beta. Spark aims to provide the rails and liquidity services, with a bet that fragmentation creates value for a neutral intermediary, which will become increasingly difficult to justify as issuers keep the networks separate.
Written by urgent.news from CoinDesk's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
