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Whyshock
@whyshock
No Smoke, Just Fire: How Spark Makes Money! For a long time, "Total Value Locked" (TVL) was the main number people looked at. But that's changing. Now, the focus is on actual cash flow, meaning crypto projects need to function as real businesses Spark is a good example of this trend. Its Spark Liquidity Layer (SLL) manages over $3.1 billion in assets and is on track to make $148 million in yearly revenue.
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Whyshock
@whyshock
Internally the Spark Liquidity Layer automatically spreads and manages funds across various L2s and DeFi protocols, making it simple for users to earn interest on their savings or borrow money wherever it's supported. Now, let's dive deeper and let data tell the story of how its system actually works, 🔽
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Whyshock
@whyshock
✧ The Fuel: Mostly Stablecoins about 90% of Spark's $3.1 billion is in stablecoins like USDC ($1.95B) and DAI ($823.73M). These are safer and less volatile. This choice makes Spark's treasury strong and less risky. This stable money then goes to work to earn yield.
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Whyshock
@whyshock
✧ The Engine: Spreading Money Across DeFi Protocols Spark puts its stablecoins into different DeFi protocols. This isn't a single risky bet but a careful plan to balance safety and earnings. Major platforms like BlackRock and SparkLend hold over half the portfolio.
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Whyshock
@whyshock
✧ The Network: Reaching More Users Earning yield is only half the job. Spark needs to reach users. While most of its assets (over 91%) are on Ethereum, Spark has moved over $260 million to Base and is starting on Arbitrum. This means more people can access the product.
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Whyshock
@whyshock
✧ The Result: Steady Returns All these parts work together to create a steady return. which is now around ~4.8% APY , even with more assets managed. Stable and predictable income attracts more investment.
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Whyshock
@whyshock
✧ A Model for DeFi Success Spark's SLL shows a clear business plan for making real, on-chain money. It teaches us to: ✧ Build with safe, high-quality assets. ✧ Use those assets in a variety of ways to earn yield. ✧ Make your product available widely. As DeFi focuses more on real business, Spark offers a solid example for others.
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Whyshock
@whyshock
If you enjoy these kinds of DeFi explorations, I'd appreciate a follow for more insights and analysis! Data for this analysis was sourced from: https://data.spark.fi/spark-liquidity-layer
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