Lenders deposit funds into Spark and receive interest payments from borrowers (supply-side fees).

Spark is a non-custodial lending protocol built on Ethereum. Spark’s development team Phoenix Labs was founded in early 2023.

SPK tokenholders own and govern the protocol. They currently take a cut of the total interest paid by borrowers (revenue).

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SparkLend | Data breakdown

# Spark Capital deployed Methodology

## 1. Overview

Capital deployed measures the value of capital allocated by Spark into investments, whether sourced from client deposits or other origins. Because this capital is typically invested to earn yield, a strong correlation is exhibited with the protocol's ability to generate revenue. For Spark, capital deployed represents the active yield-generating assets allocated by the Spark Liquidity Layer (sourced from Sky and user deposits) into various investment venues, including SparkLend, Aave V3, Morpho, and Curve. Idle buffers, undeployed deposits, and Spark's own SPK asset are excluded from this metric.

## 2. Data sources

- **Blockchain events**: `Mint`, `Burn`, and `BalanceTransfer` events from `spToken` and `AToken` contracts, `Mint` and `Burn` events from `VariableDebtToken` contracts, `ReserveDataUpdated` and `MintedToTreasury` events from `Pool` and `LendingPool` contracts, and ERC-20 `Transfer` events, covering Ethereum, Gnosis, Arbitrum, Avalanche, Base, and 10 other chains
- **External data**: End-of-day price feeds for assets, asset metadata, and reported balance sheet snapshots from Spark's off-chain reporting APIs

## 3. Step-by-step calculation

### Component A: Spark Liquidity Layer AUM tracking

- **Purpose**: The total assets under management (AUM) of the Spark Liquidity Layer are tracked across various accounts and venues.
- **Logic**: On-chain balance changes are calculated through the aggregation of ERC-20 `Transfer` events to and from Spark Liquidity Layer proxy and pool accounts, including ALM Proxies, PSM3, and D3M pools. These balances are combined with active deposits in SparkLend and Aave V3 (derived from `Mint`, `Burn`, and `BalanceTransfer` events adjusted by the liquidity index from `ReserveDataUpdated` events), Ethena cooldown balances, and reported positions from off-chain balance sheet snapshots. Non-AUM assets, such as Spark's own SPK asset, are excluded.
- **Key fields**: `block_timestamp`, `amount`, `token_address`, `account_address`

### Component B: SparkLend undeployed deposits calculation

- **Purpose**: The portion of SparkLend deposits that remains idle (unborrowed) and does not count as deployed capital is calculated.
- **Logic**: For partially deployed markets (specifically USDS and DAI on Ethereum), the market utilization rate is calculated daily as the ratio of active borrows (derived from `VariableDebtToken` mints and burns) to active deposits. The undeployed deposits for Spark Liquidity Layer are calculated through the multiplication of active deposits by the idle fraction of the market (one minus the utilization rate). Daily changes in these undeployed deposits are tracked to adjust the final deployed capital.
- **Key fields**: `active_deposits`, `active_borrows`, `utilization`, `undeployed_deposits`

### Component C: Reported allocations and exclusions

- **Purpose**: The deployed capital is adjusted to account for partially deployed positions, and idle buffers are excluded.
- **Logic**: Off-chain reported balance sheet snapshots are parsed to identify specific venue allocations (such as Aave, Curve, and Morpho vaults). For positions that Spark counts as only partially deployed, the reported allocated balance is used instead of the raw on-chain balance. Idle buffers, such as the Spark Savings V2 vault buffers, are explicitly excluded from the deployed capital calculation.
- **Key fields**: `allocated_assets_balance`, `total_assets_usds_equivalent_balance`, `total_assets_balance`

### Component D: Capital deployed aggregation and USD conversion

- **Purpose**: All components are combined, decimal normalization is applied, and values are converted to USD.
- **Logic**: The daily change in capital deployed is calculated as the sum of the daily changes in Spark Liquidity Layer AUM, minus the daily changes in SparkLend undeployed deposits, plus the daily changes in reported allocations. These daily changes are cumulatively summed over time to determine the total capital deployed. The resulting asset balances are normalized by decimal precision and converted to USD using end-of-day price feeds. A forward-fill strategy is applied to handle days without activity, and the final metric is zero-filled where applicable.
- **Key fields**: `delta_capital_deployed`, `capital_deployed`, `price_usd`

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Value of capital allocated into investments by an asset manager.

SparkSPK

Capital deployed

Capital deployed

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