Understanding Spark's TVL and Capital Allocation Strategy

A Galaxy report reveals off-chain crypto lending reached $33B in Q3 2025, compared to $41B in on-chain lending. This gap highlights continued institutional preference for crypto-backed loans outside DeFi protocols. **Key developments:** - Off-chain lending represents 45% of total crypto lending market - Institutional demand remains strong for traditional custody solutions - Spark has partnered with Anchorage Digital to serve this segment The collaboration aims to provide institutional-grade infrastructure for large-scale liquidity needs. [Read full details](https://paragraph.com/@spark-11/spark-partners-with-anchorage-digital-to-expand-support-of-institutional-lending-infrastructure)

Spark generated $45.4M in gross returns during Q4 2025, marking a notable quarter for the DAI-centric protocol. **New Growth Initiatives:** - Tri-party lending mechanisms introduced as a key expansion area - New pool initiatives launched to diversify revenue streams - Builds on Q3's strong performance of $53.01M gross revenue and $12.12M net profit **Revenue Sources:** - Spark Liquidity Layer spread earnings - SparkLend reserve factors - Market curation performance fees - USDS distribution rewards (0.6% from Sky) - Treasury yield management The protocol continues expanding its product suite while maintaining its focus on the MakerDAO ecosystem. Full financial breakdown and strategic analysis available in the [detailed Q4 report](https://paragraph.com/@spark-11/spark-q4-2025-financial-report?referrer=0xA45F1D29943D19dff604133287047a35ccbADc8a).

Spark has released its January recap, highlighting new partnerships and key updates delivered throughout the month. The DAI-focused protocol continues its mission to strengthen the DAI ecosystem through strategic collaborations and product developments. This follows a similar pattern from December, where Spark also announced partnerships and updates. **Key Points:** - New partnerships established in January - Multiple updates delivered across Spark's ecosystem - Continued focus on empowering the DAI ecosystem Spark operates SparkLend, a DAI-centric money market protocol that integrates liquidity from Maker with leading DeFi protocols.

SparkLend has officially deprecated its Gnosis market, freezing all new deposits and borrows across the chain. **Key Changes:** - All reserves frozen across affected assets - Reserve factor increased to 50% for all assets - Existing positions remain unaffected and accessible **Affected Assets:** WXDAI, sDAI, WETH, wstETH, EURe, USDT, USDC.e, GNO, and USDC **Rationale:** The decision stems from low market usage and limited reserve revenue. By reducing exposure to Gnosis Chain, SparkLend aims to minimize overall protocol risk. The team remains open to future collaboration with the Gnosis ecosystem when market conditions improve.

**sUSDS has emerged as the fastest growing asset** within Spark Savings, driving significant growth across the platform. **Key Metrics:** - Total Value Locked (TVL) has **surpassed $4.1 billion** - Platform is hitting **new all-time highs daily** - Represents massive growth from previous milestones **Recent Growth Context:** - Savings V2 TVL previously reached $300M in November - Caps were raised to accommodate demand: USDT 500M, USDC 500M, ETH 100K - Spark now leads across all chains with +$3B in TVL **Platform Features:** - Institutional-grade, non-custodial access - Real-time compounding growth - No platform fees or slippage - Deposit stablecoins or ETH, withdraw anytime in same asset The rapid adoption of sUSDS demonstrates growing institutional and retail demand for yield-generating stablecoin products in the DeFi space.