Spark shelves consumer app, pivots to backend infrastructure for fintechs

Spark, the lending and liquidity unit of the Sky ecosystem, has shelved its consumer-facing app indefinitely and repositioned itself as backend infrastructure for larger platforms. The shift means supplying yield and liquidity to companies like Robinhood instead of competing with them for users. Spark CEO Sam MacPherson called the decision correct, saying consumer apps are extremely hard to compete in.

Robinhood Earn, launched with an APY of roughly 7% on USDG deposits, routes funds into a Morpho onchain vault curated by Steakhouse Financial. Spark is one of three collateral sources and has exposure to retail deposits without owning the customer relationship. The vault has drawn more than $200 million in deposits in 24 days. MacPherson said the model is working and expects it to grow to billions.

The pivot comes as Spark's annual revenue fell from about $80 million during the bull market to roughly $20 million today. Its fastest-growing line is Bitcoin-backed OTC lending through Anchorage, with about $260 million outstanding and a target of $1 billion by year-end. Spark Prime, a hybrid prime brokerage, holds about $20 million in outstanding loans and remains in beta.

MacPherson said the stablecoin market is about to fragment more, with PayPal, Circle, Tether, Robinhood, and others issuing or supporting their own tokens. Spark aims to be the neutral layer that moves money between those networks. It migrated about $150 million into Uniswap v4 pools and accounted for about 30% of stablecoin-to-stablecoin swap volume on Uniswap, routing roughly $1.5 billion in its first 30 days. The mechanism uses a Uniswap v4 hook called DualPool. PayPal also teamed up with Spark last year to boost PYUSD liquidity. MacPherson projects onchain payments could reach $3 trillion by 2030, and said the protocol is seeking credit ratings from S&P and Moody's.

Source: CoinDesk