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

github

twitter

discord

website

linkedin

Lending

Spark

SparkLend | Data breakdown

# Spark Fees Methodology

## 1. Overview

Fees measures the total economic value paid by users to utilize the Spark protocol suite, which consists of SparkLend, Spark Savings, Spark Liquidity Layer, and Spark Curation. Interest paid by borrowers, flash loan premiums, and liquidation fees within SparkLend are captured by this metric to represent lending activity. Additionally, distribution rewards and incentives paid by Sky to Spark on referred savings balances are included, alongside yield generated on deployed capital and swap gains within Spark Liquidity Layer. Performance fees generated from outside deposits in curated Morpho vaults are captured for Spark Curation. The overall capacity of the protocol to generate economic value for its ecosystem and depositors is represented by these aggregated fees.

## 2. Data sources

- **Blockchain events**: `FlashLoan`, `LiquidationCall`, `MintedToTreasury`, and `ReserveDataUpdated` events from `Pool` contracts, `Mint`, `Burn`, and `BalanceTransfer` events from `spToken` contracts, `Mint` and `Burn` events from `VariableDebtToken` contracts, `LiquidationProtocolFeeChanged` events from `LendingPoolConfigurator` contracts, `ReserveFactorChanged` and `ReserveInitialized` events from `PoolConfigurator` contracts, `CreateMetaMorpho` events from `MetaMorphoVaultFactory` contracts, and `CreateVaultV2` events from `VaultV2Factory` contracts, covering Ethereum, Gnosis, Arbitrum, Base, and 4 other chains
- **Off-chain reports**: Daily reported revenue, distribution reward, and curator fee snapshots for Spark Savings, Spark Liquidity Layer, and Spark Curation
- **External data**: End-of-day price feeds for on-chain assets and asset metadata

## 3. Step-by-step calculation

### Component A: SparkLend interest and fee extraction

- **Purpose**: Capture interest accrued, flash loan premiums, and liquidation fees from SparkLend.
- **Logic**: Interest accrued on active loans is calculated by tracking changes in the liquidity index and variable borrow index from `ReserveDataUpdated` events, which are applied to the scaled principal balances of deposits and variable borrows derived from `Mint` and `Burn` events of `spToken` and `VariableDebtToken` contracts. Flash loan fees are extracted from the premium amount in `FlashLoan` events from `Pool` contracts. Liquidation fees are calculated from liquidation transactions identified via `LiquidationCall` events; the protocol's share is captured from ERC-20 transfers to the treasury address, and the supply-side portion is calculated by dividing the protocol fee by the liquidation protocol fee factor (tracked via `LiquidationProtocolFeeChanged` events) and multiplying by the remaining factor share.
- **Key fields**: `amount`, `index_value`, `liquidation_factor`, `reserve_factor`

### Component B: Spark Savings reward tracking

- **Purpose**: Capture distribution rewards and incentives owed by Sky to Spark.
- **Logic**: Daily reported distribution rewards on referred savings balances, rewards on asset liability management (ALM) proxy sUSDS, and the agent rate on USDS held for Spark are extracted from daily reported distribution reward snapshots. Only records flagged as Spark referrals are included. These rewards are denominated in USDS and treated as USD-equivalent values.
- **Key fields**: `reward_usd`, `is_spark_referral`

### Component C: Spark Liquidity Layer yield and swap P&L calculation

- **Purpose**: Capture yield on deployed capital and swap gains from Spark Liquidity Layer.
- **Logic**: Gross yield on deployed capital is extracted from daily reported revenue snapshots, excluding allocations held on behalf of Sky and SparkLend allocations (except for PYUSD, which uses Spark's own rate). Realized gains from swap operations on Curve and Uniswap are captured from the same snapshots when the swap profit-and-loss is positive. Additionally, the Spark Liquidity Layer's yield on its SparkLend supply is calculated on-chain by applying index updates to the Spark Liquidity Layer's scaled principal balances in SparkLend markets, grossed up by the reserve factor in force.
- **Key fields**: `gross_yield_usd`, `spark_revenue_usd`, `interest`

### Component D: Double-counting prevention

- **Purpose**: Prevent double-counting of interest between SparkLend and Spark Liquidity Layer.
- **Logic**: The Spark Liquidity Layer's share of interest earned on its SparkLend supply (calculated gross of the reserve factor) is subtracted from the total interest fees calculated for SparkLend. This ensures that the interest yield is only attributed to the Spark Liquidity Layer product and is not duplicated under SparkLend.
- **Key fields**: `fees`, `interest`

### Component E: Spark Curation performance fee tracking

- **Purpose**: Capture performance fees generated from curated Morpho vaults.
- **Logic**: Daily curator fees are extracted from reported curator fee snapshots for curated Morpho vaults. Vault creations are identified using `CreateMetaMorpho` events from `MetaMorphoVaultFactory` contracts and `CreateVaultV2` events from `VaultV2Factory` contracts to map vaults to their underlying assets. Performance fees on Spark's own Spark Liquidity Layer deposits are excluded to only capture fees on outside deposits. These fees are denominated in USD and bypass price conversion.
- **Key fields**: `curator_fees_usd`, `underlying_token_address`

### Component F: USD conversion and aggregation

- **Purpose**: Normalize all fee components to USD and aggregate them.
- **Logic**: On-chain fee amounts are normalized by decimal precision using asset metadata and converted to USD using end-of-day price feeds. Off-chain reported fees that are already denominated in USD (or USDS) are bypassed during the price conversion step. All fee components are then aggregated by day, chain, and product to produce the final daily fees metric.
- **Key fields**: `fees`, `price_usd`, `is_usd`

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

Total value users pay to use a protocol (gross fees, user-paid fees).

SparkSPK

Fees

Fees

Competitive landscape

Chain breakdown