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 Expenses Methodology

## 1. Overview

Expenses are measured as the total cost incurred by Spark to operate its business, encompassing cost of revenue, operating expenses, and token incentives. Cost of revenue is represented by the interest charged on USDS borrowed from Sky and the yield owed to depositors in Spark Savings V2 vaults. Operating expenses are comprised of swap losses incurred on Curve and Uniswap, alongside boost costs paid to external venues such as CoinEx to enhance user yields. Token incentives are captured via reward distributions paid to users staking within the protocol's contracts.

## 2. Data sources

- **Blockchain events**: `RewardPaid` events from `StakingRewards` contracts, covering Ethereum
- **Reported data**: Daily financial snapshots of the Spark Liquidity Layer, covering Ethereum, Base, and Avalanche
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Spark Liquidity Layer cost of revenue tracking

- **Purpose**: Calculate the interest expenses incurred to fund deployments
- **Logic**: Daily reported accounting data for the Spark Liquidity Layer is parsed to extract borrow costs. These costs are comprised of the Sky base rate charged on USDS borrowed from Sky and the vault savings rate owed to depositors in Spark Savings V2 vaults. Allocations held on behalf of Sky, such as the Curve USDT pool, are explicitly excluded from the calculation.

### Component B: Spark Liquidity Layer operating expenses extraction

- **Purpose**: Capture swap losses and yield boost costs
- **Logic**: Realized losses from swap operations on Curve and Uniswap are identified from daily reported data and treated as positive operating expenses. Additionally, boost costs paid to external venues such as CoinEx to increase user yields are extracted and aggregated as operating expenses.

### Component C: Token incentives calculation

- **Purpose**: Quantify the value of distributed staking rewards
- **Logic**: `RewardPaid` events are parsed from `StakingRewards` contracts. The reward amount is extracted from each event, normalized by the decimal precision of the distributed asset, and converted to USD using end-of-day price feeds.

### Component D: Final aggregation

- **Purpose**: Combine all expense categories into a single metric
- **Logic**: Cost of revenue, operating expenses, and token incentives are summed on a daily basis. Missing days are filled with zeros to ensure a continuous time series.

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

Total project operating and incentive expenses.

SparkSPK

Expenses

Expenses

Competitive landscape

Chain breakdown