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 Revenue Methodology

## 1. Overview

Revenue is measured as the portion of fees retained by the protocol, as determined by its take rate and reserve factors, alongside yield and incentives earned across its products. These earnings are generated from SparkLend, Spark Savings, Spark Liquidity Layer, and Spark Curation. Interest accrued to the protocol, liquidation fees, treasury deposit yield, referred savings rewards from Sky, yield or swap gains from the Spark Liquidity Layer, and performance fees from curated Morpho vaults are captured before operating expenses and token incentives. All components are aggregated daily to provide a comprehensive view of protocol performance.

## 2. Data sources

- **Blockchain events**: `LiquidationProtocolFeeChanged` events from `LendingPoolConfigurator` contracts; `ReserveFactorChanged` and `ReserveInitialized` events from `PoolConfigurator` contracts; `ReserveDataUpdated`, `LiquidationCall`, and `MintedToTreasury` events from `Pool` contracts; `Mint`, `Burn`, and `BalanceTransfer` events from `spToken` and `VariableDebtToken` contracts; ERC-20 token transfers; and `CreateMetaMorpho` events from `MetaMorphoVaultFactory` contracts and `CreateVaultV2` events from `VaultV2Factory` contracts, covering Ethereum, Gnosis, and Base
- **Off-chain reports**: Daily accounting snapshots of Spark Savings distribution rewards, Spark Liquidity Layer actual revenues, and Spark Curation curator fees
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: SparkLend interest accrued to protocol

- **Purpose**: Calculate the protocol's share of interest accrued from active variable borrow loans.
- **Logic**: Outstanding variable borrow balances are tracked over time by aggregating `Mint` and `Burn` events from `VariableDebtToken` contracts. Reserve factors are extracted from `ReserveFactorChanged` and `ReserveInitialized` events from `PoolConfigurator` contracts. Interest is accrued between reserve updates (using `ReserveDataUpdated` events from `Pool` contracts) by applying the change in the variable borrow index to the scaled principal balance. The protocol's share of this accrued interest is calculated by multiplying the total accrued interest by the reserve factor.
- **Key fields**: `amount`, `balance_increase`, `index_value`, `reserve_factor`

### Component B: SparkLend treasury interest accruals

- **Purpose**: Calculate interest earned on the protocol's own deposits in SparkLend.
- **Logic**: The protocol treasury's deposit balance is tracked by aggregating `Mint`, `Burn`, and `BalanceTransfer` events from `spToken` contracts, as well as `MintedToTreasury` events from `Pool` contracts. Interest is accrued on these treasury deposits by applying the change in the liquidity index (from `ReserveDataUpdated` events) to the treasury's scaled principal balance.
- **Key fields**: `amount`, `balance_increase`, `index_value`

### Component C: SparkLend liquidation revenue

- **Purpose**: Capture the protocol's share of liquidation fees.
- **Logic**: Liquidation events are identified using `LiquidationCall` events from `Pool` contracts. Protocol fee transfers are identified where assets are transferred from the liquidated user to the treasury address, using ERC-20 token transfers. The protocol's liquidation revenue is determined by applying the liquidation protocol fee factor (tracked via `LiquidationProtocolFeeChanged` events from `LendingPoolConfigurator` contracts) to the transferred collateral.
- **Key fields**: `amount`, `liquidation_factor`

### Component D: Spark Savings referral rewards

- **Purpose**: Capture rewards owed by Sky to Spark on referred savings balances.
- **Logic**: Daily distribution rewards are extracted from off-chain accounting reports for Spark Savings. Only rewards 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 E: Spark Liquidity Layer yield and swap gains

- **Purpose**: Calculate the yield and swap profits generated by the Spark Liquidity Layer.
- **Logic**: Yield on deployed capital is extracted from daily off-chain accounting reports, excluding allocations held on behalf of Sky and on-chain SparkLend lines (except for PYUSD, which uses Spark's own rate). Additionally, swap P&L gains from Curve and Uniswap swaps are included when the net swap revenue is positive. The Spark Liquidity Layer's yield on its own SparkLend supply is calculated on-chain by applying the reserve factor to the interest accrued on its deposits, which is then netted out from SparkLend's interest revenue to avoid double-counting.
- **Key fields**: `gross_yield_usd`, `spark_revenue_usd`, `is_swap_pnl`, `is_held_for_sky`

### Component F: Spark Curation performance fees

- **Purpose**: Capture performance fees earned by Spark from curating Morpho vaults.
- **Logic**: Daily curator fees are extracted from off-chain accounting reports for Spark Curation. Only performance fees on outside deposits in the curated Morpho vaults are captured, while fees on Spark's own Spark Liquidity Layer deposits are excluded. The underlying assets for the curated vaults are identified by parsing `CreateMetaMorpho` events from `MetaMorphoVaultFactory` contracts and `CreateVaultV2` events from `VaultV2Factory` contracts.
- **Key fields**: `curator_fees_usd`, `vault_address`, `underlying_token_address`

### Component G: Normalization and USD conversion

- **Purpose**: Normalize all revenue components and convert them to USD.
- **Logic**: On-chain revenue amounts are normalized by decimal precision using asset metadata. Non-USD denominated revenues are converted to USD using end-of-day price feeds. Price conversion is bypassed for USD-denominated revenues (such as USDS rewards, reported yields, and curator fees). All components are aggregated daily by chain and product using UTC day boundaries.
- **Key fields**: `revenue`, `price_usd`, `is_usd`

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

fees * take_rate (illustrative — revenue is observed directly per project, not derived from take_rate)

Fee revenue retained after supply-side payouts. Before cost of revenue (e.g. L2 DA fees) and before operating expenses.

SparkSPK

Revenue

Revenue

Competitive landscape

Chain breakdown