Spark, the first Star (formerly SubDAO) of the Sky Ecosystem, known for creating the decentralized lending and borrowing protocol SparkLend, has announced the launch of the Spark Liquidity Layer. This solution utilizes automated smart contracts to deploy, withdraw, and balance stablecoin liquidity across blockchains on demand.
Spark Liquidity Layer distributes USDS and sUSDS, Sky’s native stablecoin, and the yield-bearing tokenized stablecoin deposited into the Sky Savings Rate, respectively. The total supply of USDS has now surpassed $1.2 billion, signaling the utility of this asset in the DeFi ecosystem. This launch unlocks cross-chain liquidity and yield optimization for stablecoins across different protocols in an automated and on-demand way.
Users of stablecoins like USDC can now always access yield from sUSDS through a seamless conversion process while retaining the ability to withdraw funds whenever needed. This unlocks a multichain path for Sky’s stablecoin, which is set to become available across the blockchain ecosystem as the Spark Liquidity Layer expands to new chains.
Sam MacPherson, CEO at Phoenix Labs, said, “With the Spark Liquidity Layer, an automated smart contract dynamically balances the mix of a highly liquid stablecoin in USDC with a yield-generating stablecoin in sUSDS across networks in real-time to deliver the optimum DeFi-enabled results for users. This ensures liquidity is provided precisely when users need it rather than being locked idly across networks, which has traditionally left billions in liquidity underutilized.”
Without relying on slower canonical bridges, Spark’s system ensures fast and no-slippage cross-chain transfers for USDC with USDS and its savings version sUSDS. Spark will channel efficient on-demand sUSDS yield from the Sky ecosystem across various networks, with future expansion plans in place to chains such as Base, Arbitrum, Solana, Polygon, and Optimism.
By creating liquidity between USDC, USDS, and sUSDS across multiple chains, the Spark Liquidity Layer allows USDS liquidity to grow on new networks while transferring yield from the Sky Protocol to other chains through sUSDS.
Spark plays a crucial role in driving reliable and scalable liquidity and strategic asset deployment across DeFi. Developed by the R&D company Phoenix Labs, among other companies, Spark launched in April 2023 with its first product SparkLend, which now holds a total value locked (TVL) of approximately $2.3 billion. Its second product, Spark Savings, is integral to the approximately $2 billion locked in the Sky Savings Rate (SSR) which generates a steady yield of 6.5%.
Rune Christensen, co-founder of Sky, commented, “Spark exemplifies how the Stars in the Sky ecosystem can move fast, innovate, and deliver immense value for the broader DeFi space. The launch of the Spark Liquidity Layer demonstrates this agility, solving the key challenges of liquidity fragmentation and driving momentum throughout the industry.”