According to The Block, Spark Protocol, a lending sub-DAO within the Sky ecosystem, is allocating up to $1.1 billion of Spark liquidity layer assets to Ethena’s USDe and sUSDe tokens. The team estimates that under “favorable market conditions,” it could achieve an annual yield (APY) of about 27% to help drive Sky’s revenue and maximize returns for Savings USDS depositors.
Sky (formerly MakerDAO)'s subsidiary Spark Protocol announced on Tuesday that it is integrating Ethena’s synthetic dollar USDe into its “liquidity layer.” As part of the collaboration, Spark plans to allocate up to $1.1 billion of assets to Ethena’s yield tokens to enhance “capital efficiency.”
USDe was launched in early 2024 and stands out in the stablecoin space because it maintains its peg to the dollar through algorithmic trading. The rise of USDe has made it the fourth-largest stablecoin, partly because, like other on-chain stablecoin products, it pays holders yields, unlike enterprise-backed assets like Tether.
Prior to this latest move, Spark liquidity layer assets were limited to Circle’s stablecoins and Sky’s and sUSDS tokens. Spark estimates that by directly incorporating Ethena’s USDe and sUSDe tokens into its portfolio, it can achieve an annual yield of about 27% under “favorable market conditions.”
“Ethena’s inclusion demonstrates Spark’s commitment to innovation and scalability,” the Spark team wrote in a blog post. “By enhancing liquidity management and revenue generation, Spark consolidates its vision of becoming a DeFi yield engine.”
The team stated that this is Spark’s first step on its liquidity layer, aiming to make it easier for other DeFi protocols to access Sky’s yield-stablecoin Savings USDS through a multi-chain system.
“By incorporating Ethena’s USDe and sUSDe into its assets, Spark adds a major yield opportunity to its infrastructure, preparing to maximize returns for Savings USDS depositors and the Spark ecosystem,” the Spark team said.
The Spark liquidity layer manages $6.2 billion in stablecoin liquidity, allowing users to convert Circle’s USDC stablecoin into Sky’s USDS or yield stablecoin “Savings USDS” (sUSDS) on their chosen supported networks. The stable interest rate for Savings USDS is determined by Sky’s governance DAO and is currently about 12.5%, supported by Sky’s revenue sources, including over-collateralized DeFi loans and real-world investments.
USDS is currently the third-largest stablecoin by market cap, fully redeemable for MakerDAO’s original dollar-pegged token DAI, which has fallen to the fifth-largest stablecoin.
Since March, Spark has engaged with Ethena’s USDe and sUSDe tokens through its over-collateralized Morpho vaults. In December last year, the protocol’s DAO considered adjusting its risk exposure to this network.
“Considering Ethena’s significant growth over the past few months, with USDe’s supply now exceeding USDS, we recommend adopting a stricter total exposure threshold, i.e., 20% of USDe supply,” the team noted, which is roughly equivalent to $1.05 billion in USDS.
Meanwhile, Ethena claims to contribute approximately $120 million in annual revenue to the Sky ecosystem. In December last year, Ethena proposed to include its new USDtb stablecoin in Spark’s $1 billion tokenization contest, which aims to bring real-world assets into DeFi by providing funding to selected participants. The USDtb token is ultimately backed by U.S. government bonds via BlackRock’s BUIDL fund.
Spark was spun off as part of MakerDAO, initiated by founder Rune Christensen’s “Endgame” plan. The plan aims to improve ecosystem returns by launching semi-autonomous “sub-DAOs” that function like startups. Since its launch, Spark’s money market has contributed approximately $232 million in annual revenue to the Sky ecosystem.
Sky の Lending SubDAO Spark の目標は、Ethena の USDe と SUSDe トークンに直接投資することであり、投資額は最大で11億ドルに達します
According to The Block, Spark Protocol, a lending sub-DAO within the Sky ecosystem, is allocating up to $1.1 billion of Spark liquidity layer assets to Ethena’s USDe and sUSDe tokens. The team estimates that under “favorable market conditions,” it could achieve an annual yield (APY) of about 27% to help drive Sky’s revenue and maximize returns for Savings USDS depositors.
Sky (formerly MakerDAO)'s subsidiary Spark Protocol announced on Tuesday that it is integrating Ethena’s synthetic dollar USDe into its “liquidity layer.” As part of the collaboration, Spark plans to allocate up to $1.1 billion of assets to Ethena’s yield tokens to enhance “capital efficiency.”
USDe was launched in early 2024 and stands out in the stablecoin space because it maintains its peg to the dollar through algorithmic trading. The rise of USDe has made it the fourth-largest stablecoin, partly because, like other on-chain stablecoin products, it pays holders yields, unlike enterprise-backed assets like Tether.
Prior to this latest move, Spark liquidity layer assets were limited to Circle’s stablecoins and Sky’s and sUSDS tokens. Spark estimates that by directly incorporating Ethena’s USDe and sUSDe tokens into its portfolio, it can achieve an annual yield of about 27% under “favorable market conditions.”
“Ethena’s inclusion demonstrates Spark’s commitment to innovation and scalability,” the Spark team wrote in a blog post. “By enhancing liquidity management and revenue generation, Spark consolidates its vision of becoming a DeFi yield engine.”
The team stated that this is Spark’s first step on its liquidity layer, aiming to make it easier for other DeFi protocols to access Sky’s yield-stablecoin Savings USDS through a multi-chain system.
“By incorporating Ethena’s USDe and sUSDe into its assets, Spark adds a major yield opportunity to its infrastructure, preparing to maximize returns for Savings USDS depositors and the Spark ecosystem,” the Spark team said.
The Spark liquidity layer manages $6.2 billion in stablecoin liquidity, allowing users to convert Circle’s USDC stablecoin into Sky’s USDS or yield stablecoin “Savings USDS” (sUSDS) on their chosen supported networks. The stable interest rate for Savings USDS is determined by Sky’s governance DAO and is currently about 12.5%, supported by Sky’s revenue sources, including over-collateralized DeFi loans and real-world investments.
USDS is currently the third-largest stablecoin by market cap, fully redeemable for MakerDAO’s original dollar-pegged token DAI, which has fallen to the fifth-largest stablecoin.
Since March, Spark has engaged with Ethena’s USDe and sUSDe tokens through its over-collateralized Morpho vaults. In December last year, the protocol’s DAO considered adjusting its risk exposure to this network.
“Considering Ethena’s significant growth over the past few months, with USDe’s supply now exceeding USDS, we recommend adopting a stricter total exposure threshold, i.e., 20% of USDe supply,” the team noted, which is roughly equivalent to $1.05 billion in USDS.
Meanwhile, Ethena claims to contribute approximately $120 million in annual revenue to the Sky ecosystem. In December last year, Ethena proposed to include its new USDtb stablecoin in Spark’s $1 billion tokenization contest, which aims to bring real-world assets into DeFi by providing funding to selected participants. The USDtb token is ultimately backed by U.S. government bonds via BlackRock’s BUIDL fund.
Spark was spun off as part of MakerDAO, initiated by founder Rune Christensen’s “Endgame” plan. The plan aims to improve ecosystem returns by launching semi-autonomous “sub-DAOs” that function like startups. Since its launch, Spark’s money market has contributed approximately $232 million in annual revenue to the Sky ecosystem.