Research Report | Spark Protocol In-Depth Analysis & SPK Token Valuation

I. Project Overview

Spark Protocol is MakerDAO’s native lending platform, positioned as the “liquidity and yield infrastructure layer” for on-chain finance. Unlike traditional DeFi protocols, Spark not only provides lending and savings products, but also leverages the Spark Liquidity Layer (SLL) to systematically deploy stablecoin capital across multiple chains and protocols, thus maximizing capital efficiency.

From a product perspective, Spark currently consists of three core modules:

• SparkLend: A decentralized lending market based on DAI and USDS, currently with a TVL of $3.25 billion;
• Savings: Offers USD-like savings yield via sUSDS, with a TVL of $3.26 billion;
• SLL Liquidity Layer: Built on the Sky reserve, automatically deploying liquidity via cross-chain mechanisms and liquidity pool bridges to protocols like Aave, Morpho, and Curve, currently managing assets of $5.24 billion.

Notably, Spark’s underlying funds mainly originate from the stablecoin reserves of Sky (USDS, sUSDS, USDC), with a total volume exceeding $6.5 billion. Allocation is managed through the Sky Allocation System, while exchange rate stability is maintained by the Sky Peg mechanism. This design not only deepens Spark's liquidity, but also establishes it as a core source of yield strategies across multiple chain ecosystems.

In terms of tokenomics, Spark’s native token is SPK, with a total supply of 10 billion. 65% will be distributed to users via the Sky platform over the next ten years (no mining has started yet). The remainder is allocated as 23% for the ecosystem (partially via Ignition airdrop), and 12% for contributors, both subject to up to four years of linear vesting. Currently, SPK functions primarily as a governance token, with future use cases potentially linked to staking incentives and protocol security mechanisms.

Overall, Spark acts more as a “capital scheduler” and “yield aggregator” for on-chain funds; its edge lies not in single-product competitiveness, but in enabling seamless movement of liquidity across protocols and networks. This is achieved through automated allocation, injecting stable and efficient liquidity into the DeFi market. Should SPK complete the governance/staking incentive loop, its role as infrastructure may strengthen further.

II. Project Highlights

Incubated by MakerDAO, Backed by Sky’s Deep Stablecoin Reserve
Spark is an internal MakerDAO project, not an independent protocol, and is supported by Sky’s $6.5 billion reserve. Compared to traditional DeFi protocols, Spark has inherent advantages in capital cost, stability, and liquidity scheduling power.

Multi-Product Synergy, Complete Stablecoin Utilization Pathway
With three main products—SparkLend (lending), Savings, and SLL (liquidity layer)—Spark provides a full stablecoin flow: deposit → borrow → deploy → yield. The current total TVL across modules exceeds $11.8 billion, demonstrating significant capital scale.

SLL Liquidity Layer as Core Innovation, On-Chain “Capital Allocator”
Spark Liquidity Layer (SLL), via the Sky Allocation System and Sky PSM, automatically allocates USDS, sUSDS, and USDC cross-chain and cross-protocol to Aave, Curve, Morpho, etc. This “structured allocation” and “yield optimization” capability is rare in today’s DeFi market.

Cross-Chain Bridging + Minting, Multi-Chain Deployable & Stable Peg
SLL can bridge assets to networks like Base, OP, Arbitrum, etc., combined with a minting mechanism (USDS / sUSDS) and Sky PSM pegging. This ensures cross-chain deployments with sustained liquidity and stable pegs, providing foundational liquidity for the DeFi market.

Strong Team Background, Core Members from Phoenix Labs, Maple, L2Beat, etc.
The project is developed by the Phoenix Labs team, experts in DeFi protocol R&D. Co-founder Lucas Manuel comes from Maple Finance, lead engineer Kris co-founded L2Beat, both bringing deep data and infrastructure experience.

III. Market Valuation Outlook

$SPK has finished its TGE and is now tradable on-chain. The total supply is 10,000,000,000 SPK, with about 1.7 billion in circulation and a circulating market cap of ~$91.96 million, placing it in the lower to middle range for the lending sector.

Considering Spark Protocol is the official lending protocol from MakerDAO, backed by Sky’s $6.5 billion stablecoin reserves, and is deployed across Ethereum, Arbitrum, Base, Optimism, Unichain, etc.—covering SparkLend, Savings, and SLL auto-liquidity injection—the project forms a strong ecosystem loop. Its market cap has yet to fully reflect its role as critical DeFi infrastructure.

Comparing to similar projects such as Morpho (Ethereum lending), Syrup (institutional lending), and even MakerDAO itself, current circulating market caps for decentralized lending protocols range between $410 million and $1.7 billion. Hence, Spark’s present valuation has substantial room for further upside.

Below is a scenario-based valuation forecast based on current circulating supply:

IV. Tokenomics

Total Supply: 10B (10,000,000,000) SPK Allocation:

• Sky Farming: 65%
• Ecosystem: 23%
• Core Team: 12%

Core Utilities:

• $SPK is Spark’s native governance and staking token, to be used for protocol governance, security, and incentive distribution.
• Users staking SPK earn Spark Points and will participate in future joint incentives with Symbiotic.
• SPK will gradually transition to full on-chain governance and currently supports Snapshot voting.
• 6.5 billion SPK will be released via a 10-year mining plan; users can participate by staking USDS.

V. Team & Funding

Team:

• Lucas Manuel | Core Contributor
  Co-Founder of Phoenix Labs, ex-tech lead at Maple Finance, specializes in DeFi protocol smart contract engineering. Leads Spark’s architecture and system security.
• Nadia | Core Contributor
  Co-Founder of Phoenix Labs. Formerly led Sky ecosystem growth and is heavily involved in Spark’s product design and market expansion.
• Kris Kaczor | Contributor
  L2Beat Co-founder and Phoenix Labs engineer; background in data engineering and cross-chain integration, driving Spark’s technical architecture and multi-chain deployment.

VI. Fundraising:

Spark Protocol has not disclosed independent funding rounds. Its core developer Phoenix Labs is strategically backed by the MakerDAO community and Sky. Spark is deeply integrated within the Maker ecosystem, with its main funding sourced from Sky and enjoys internal stablecoin allocation rights. As a “DAO-endogenous core infrastructure” project, Spark does not follow a conventional VC fundraising path.

VII. Potential Risks

1. Spark’s liquidity and mining mechanisms are highly reliant on Sky’s stablecoin reserves (USDS, sUSDS, USDC). Any systemic issues with Sky (mechanism failure, governance, or asset stability) could lead to cascading impacts on Spark’s core functions (lending, savings, liquidity injection).
2. SPK currently functions mainly for governance voting and staking to earn Spark Points; it is not yet strongly tied to protocol revenue, fee sharing, or staking security. If future utility integration lags, token value may be inadequately supported, impacting secondary market performance.

VIII. Official Links

• Website: https://spark.fi/
• Twitter: https://x.com/sparkdotfi
• Telegram: https://t.me/sparkdotfi_chat