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).

governance

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Lending

Spark

SparkLend | Data breakdown

# Spark Cost of revenue Methodology

## 1. Overview

Cost of revenue measures the interest expenses incurred by the Spark Liquidity Layer to fund its capital deployments. These expenses consist of the interest charged at the Sky base rate on USDS borrowed from Sky, as well as the vault savings rate owed to depositors in the Spark Savings V2 vaults. Allocations held directly on behalf of Sky are excluded from this metric.

## 2. Data sources

- **Reported accounting data**: Daily financial snapshots from Spark's reported accounting data, covering Ethereum, Base, and Avalanche

## 3. Step-by-step calculation

### Component A: Spark Liquidity Layer funding cost extraction

- **Purpose**: Extract the borrowing and savings interest expenses incurred by the Spark Liquidity Layer
- **Logic**: Daily financial snapshots are parsed to extract the USDS borrow costs from Sky and the vault savings costs owed to Spark Savings V2 depositors. These costs are represented by the `sky_borrow_cost` and `saving_v2_borrow_cost` fields. Only records with non-zero costs are retained for the calculation.
- **Key fields**: `sky_borrow_cost`, `saving_v2_borrow_cost`, `token_symbol`

### Component B: Exclusion of Sky-managed allocations

- **Purpose**: Filter out capital allocations that are managed on behalf of Sky
- **Logic**: Allocations held directly for Sky, such as the Curve USDT pool, are identified and excluded from the calculation. This is achieved by filtering out records where the protocol asset is flagged as held for Sky. Additionally, swap lines representing realized swap results are excluded as no funding costs are carried by these positions.
- **Key fields**: `protocol_token`

### Component C: Chain attribution and USD aggregation

- **Purpose**: Attribute costs to the correct blockchain and aggregate the final USD values
- **Logic**: The blockchain is determined based on the suffix of the protocol asset identifier, where suffixes for Base and Avalanche attribute the records to their respective chains, and all other records default to Ethereum. The extracted cost of revenue values, which are already denominated in USD, are aggregated by day, chain, and product. Missing days are filled with zeros to ensure a continuous time series.
- **Key fields**: `protocol_token`, `timestamp`, `chain_id`, `cost_of_revenue`

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

Expenses paid to third parties to deliver core service output.

SparkSPK

Cost of revenue

Cost of revenue

Competitive landscape

Chain breakdown