# Spark Liquidity Layer Total value locked Methodology

## 1. Overview

Total value locked (TVL) measures the total value of assets deposited in and managed by the Spark Liquidity Layer. Assets are allocated across various yield-generating strategies, lending pools, and direct deposit modules (D3Ms) so that liquidity is optimized. Active deposits in SparkLend, Aave V3, Morpho, Ethena cooldown contracts, and Peg Stability Modules (PSM) are included in this measurement. Double counting is avoided by excluding SparkLend deposits from the Spark Liquidity Layer TVL when aggregating at the project level.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events, `BalanceTransfer`, `Mint`, and `Burn` events from `AToken` and `spToken` contracts, and `ReserveDataUpdated` events from `LendingPool` and `Pool` contracts, covering Ethereum, Arbitrum, Base, Optimism, and 10 other chains
- **External data**: End-of-day price feeds for deposited assets

## 3. Step-by-step calculation

### Component A: Spark Liquidity Layer portfolio account balance tracking

- **Purpose**: Track raw asset balances across Spark Liquidity Layer portfolio accounts
- **Logic**: ERC-20 `Transfer` events are parsed for designated Spark Liquidity Layer accounts, including liquidity manager proxies (`ALM_Proxy`), Peg Stability Modules (`PSM3`), Morpho Direct Deposit Modules (`Morpho D3M4626TypePool`), and Aave V3 Direct Deposit Modules (`D3MAaveV3NoSupplyCapTypePool`, `D3MAaveV3USDSNoSupplyCapTypePool`). Inflows (transfers to these accounts) are treated as positive changes, and outflows (transfers from these accounts) are treated as negative changes. Cumulative balances are calculated over time by summing these net changes. Specific non-AUM assets, such as SPK, are excluded from the balance calculations.
- **Key fields**: `block_timestamp` (timing), `amount` (asset quantities), `token_address` (asset identification)

### Component B: Aave V3 and SparkLend deposit tracking

- **Purpose**: Calculate the value of rebasing deposit assets held in Aave V3 and SparkLend
- **Logic**: `Mint`, `Burn`, and `BalanceTransfer` events from `AToken` (Aave V3) and `spToken` (SparkLend) contracts are aggregated to determine the scaled principal balances for Spark Liquidity Layer accounts. To account for accrued interest, these scaled balances are multiplied by the liquidity index, which is updated via `ReserveDataUpdated` events from `LendingPool` and `Pool` contracts. The actual active deposit balances over time are derived from this multiplication.
- **Key fields**: `block_timestamp` (timing), `amount` (deposit quantities), `index_value` (interest multiplier)

### Component C: Ethena cooldown balance tracking

- **Purpose**: Capture assets currently in the Ethena cooldown phase
- **Logic**: On-chain state snapshots of Ethena sUSDe cooldown balances are parsed to extract the underlying asset amounts held on behalf of Spark Liquidity Layer accounts. These balances are added directly to the total assets under management.
- **Key fields**: `timestamp` (timing), `amount` (cooldown quantities), `token_address` (asset identification)

### Component D: USD conversion and aggregation

- **Purpose**: Combine all components, prevent double counting, and normalize to USD
- **Logic**: The tracked balances from portfolio accounts, Aave V3 deposits, SparkLend deposits, and Ethena cooldown contracts are combined. To prevent double counting when calculating project-level TVL, SparkLend deposit assets are excluded from the Spark Liquidity Layer AUM calculation if they are already accounted for in SparkLend's native TVL. The remaining asset balances are normalized by decimal precision and multiplied by end-of-day asset prices to determine the final TVL in USD. Daily values are forward-filled to ensure continuity across UTC day boundaries.
- **Key fields**: `timestamp` (timing), `tvl` (raw asset balances), `price_usd` (asset valuation)

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

Total value locked (TVL)

Total value locked (TVL) — value deposited into the project's applications.

Total value locked

Asset management

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).

Spark Liquidity Layer

Total value locked

Total value locked

Chain breakdown