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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Lending

Spark

SparkLend | Data breakdown

# Spark Earnings Methodology

## 1. Overview

Earnings measures the net value retained by Spark after subtracting all expenses from its revenue. On-chain profitability across core products, including SparkLend, Spark Liquidity Layer, Spark Savings, and Spark Curation, is reflected by this metric. Expenses subtracted from revenue include operating expenses, cost of revenue, and token incentives. Sustainable net income generation from lending, liquidity provisioning, and curation activities is assessed through this metric.

## 2. Data sources

- **Revenue**: Derived from the Revenue metric
- **Expenses**: Derived from the Expenses metric, which aggregates the Cost of revenue, Operating expenses, and Token incentives metrics

## 3. Step-by-step calculation

### Component A: Revenue aggregation

- **Purpose**: Aggregate total protocol revenue across all Spark products
- **Logic**: Daily revenue is aggregated from SparkLend (interest on active loans, flash loan fees, liquidation fees, and treasury interest), Spark Savings (distribution rewards referred from Sky), Spark Liquidity Layer (yield on deployed capital and swap gains), and Spark Curation (performance fees on curated Morpho vaults).

### Component B: Expense aggregation

- **Purpose**: Aggregate total protocol expenses across all Spark products
- **Logic**: Daily expenses are calculated as the sum of cost of revenue (interest charged on USDS borrowed from Sky and vault savings rate owed to Spark Savings V2 depositors), operating expenses (losses on Spark Liquidity Layer swaps and boost costs paid to external venues), and token incentives (staking rewards paid to users).

### Component C: Earnings calculation

- **Purpose**: Calculate net earnings by subtracting total expenses from total revenue
- **Logic**: Daily net earnings are calculated by subtracting the aggregated daily expenses from the aggregated daily revenue. In instances where expenses exceed revenue, a negative earnings value (net loss) is recorded. Values are aligned by timestamp and product ID, with missing days filled with zeros where applicable.

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

SparkSPK

Earnings

Earnings

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