Spark migrated $150M into Uniswap v4, routed $1.5B in stablecoin swaps, and powers Robinhood's yield product after shelving its consumer app. Its $1B target for Bitcoin-backed loans signals institutional demand.
The stablecoin market is fragmenting, and Spark, the lending and liquidity unit of Sky, is betting it can profit from the split by becoming the infrastructure layer that moves money between tokens.
Spark shut a consumer app late last year and pivoted to a business-to-business model. The shift lets it supply yield and liquidity to platforms consumers already use, rather than compete with Coinbase, PayPal and Robinhood for users.
“Consumer apps are extremely hard to compete in,” Sam MacPherson, CEO of Phoenix Labs, said in an interview with CoinDesk. Spark is developed by Phoenix Labs and supported through Sky’s governance and capital.
Shelving the app was “definitely the correct decision,” he said.
The strategy has already produced results. Spark moved about $150 million into Uniswap v4 pools pairing its USDS stablecoin against Tether’s USDT and PayPal’s PYUSD. The system accounted for roughly 30% of stablecoin-to-stablecoin swap volume on Uniswap and routed about $1.5 billion in its first 30 days, MacPherson said.
That 30% covers only swaps between stablecoins, not all Uniswap trades involving one.
The mechanism underneath is a Uniswap v4 hook called DualPool. It keeps liquidity earning yield in Spark’s vaults while idle and pulls it into the pool only when a swap needs it, settling within a single block.
Spark also struck infrastructure deals directly with issuers. PayPal linked up with Spark last year to boost the liquidity of PYUSD as it competes with USDT and Circle’s USDC.
Robinhood’s Earn product shows how the replacement model works. Launched with an APY of roughly 7% on USDG deposits, it routes user funds into a Morpho onchain vault curated by decentralized advisory firm Steakhouse Financial. The vault allocates across lending markets involving Ethena’s USDe, Maple’s syrupUSDG and Spark’s spUSDG. It has drawn more than $200 million in deposits in the last 24 days, according to onchain data.
The arrangement gives Spark exposure to retail deposits without owning the app or customer relationship. “Robinhood is quite large, and so we expect this to grow to billions in size,” MacPherson said.
The wider stablecoin market is indeed splitting. PayPal has PYUSD, Circle has USDC, Tether has USDT. Robinhood has joined the Global Dollar (USDG) consortium and is building its own chain. OpenUSD (OUSD) includes Stripe and Coinbase. Beyond those giants are hundreds of other tokens, including Ethena’s USDe and Sky’s USDS.
Spark bets that fragmentation creates a valuable role for a neutral intermediary. Its stablecoin FX layer on Uniswap is designed to help institutions switch between stablecoins by concentrating liquidity in yield-bearing pools.
MacPherson sees payments as the catalyst that turns fragmentation into volume. With the GENIUS Act coming into force next year and the CLARITY Act potentially advancing, he projects onchain payments could reach $3 trillion by 2030.
“It’s going to seem like nothing’s happening, and then all of a sudden a lot is going to happen at once,” he said.
The pivot extends beyond stablecoins. Spark Prime, a hybrid prime brokerage combining centralized and onchain services, holds about $20 million in outstanding loans and remains in beta. MacPherson said most major crypto funds are onboarding and that conversations with traditional finance firms are increasing, partly because venues like Hyperliquid have drawn institutional interest to crypto-native trading of equities and other assets.
Spark’s Bitcoin-backed over-the-counter loans issued through Anchorage stand at about $260 million in outstanding balance, with roughly $400 million originated and a target of $1 billion by year-end. That target would require outstanding balances to nearly quadruple in about six months, even as MacPherson acknowledged that market conditions had “lowered the demand a little bit.”
Demand comes partly from bitcoin miners who “need to fund operations at all times regardless of whether it’s a bull or bear market,” he said. The bottleneck is onboarding speed.
The protocol is also pursuing credit ratings from S&P and Moody’s alongside assessments from crypto-native agencies such as Credora. Those ratings could help institutional risk teams approve Spark as a counterparty.
All of this is unfolding during a difficult stretch for decentralized finance. Spark’s annual revenue has fallen from about $80 million during the bull market to roughly $20 million today, MacPherson said.
Even so, he frames the bear market as manageable. “This has been one of the easier bear markets,” he said. “The fundamentals, adoption, the regulatory clarity, it’s all systems go on the institutional side.”
Spark provides “the rails and the liquidity services,” MacPherson said. Its bet rests on fragmentation, a scenario that gets riskier if issuers keep liquidity inside their own networks.
The firm’s outstanding Bitcoin-backed OTC loans remain at $260 million, with a $1 billion year-end target that would require a rapid acceleration in originations.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.