In a recent fireside chat hosted by Anthony Y. from Artemis, Sam MacPherson, co-founder and CEO of Spark, provided a deep look into how Spark is reshaping institutional access to DeFi credit markets within the Sky (formerly MakerDAO) ecosystem.

MacPherson explained Spark through a simple yet powerful analogy:

• Sky operates like a central bank—it issues the USDS stablecoin and provides liquidity to its subDAOs.

• Spark, in turn, acts as a commercial bank, borrowing capital from Sky at wholesale rates and deploying it into real opportunities across DeFi, CeFi, and RWA (Real-World Assets).

This layered structure allows Spark to function as the operational arm of Sky—closer to markets, partnerships, and end users—while maintaining stability and scale at the protocol level.

At the heart of Spark lies SparkLend, now the second-largest money market on Ethereum. Unlike many DeFi protocols that list an endless array of collateral types, SparkLend focuses on institutional-grade assets—BTC, ETH, LSTs, LRTs—and provides cross-margin stablecoin borrowing.

This disciplined approach appeals to institutional players seeking efficient, large-scale credit lines. For example, PayPal recently deployed $1 billion in PYUSD liquidity into SparkLend, a partnership that combines PayPal’s stablecoin distribution power with Spark’s on-chain lending infrastructure. Borrowing rates as low as 2.99% make SparkLend one of the most competitive on-chain credit facilities.

Traditional DeFi incentives often rely on token emissions or temporary yield boosts, but Spark’s model is targeted and scalable. Through its partnership with PayPal, Spark can directly deploy liquidity into pools like Curve’s USDS/PYUSD pair, ensuring that borrowers and liquidity providers can operate with confidence and minimal slippage.

This represents a structural evolution—liquidity as a service for stablecoin issuers—offering predictable outcomes without wasteful incentives.

MacPherson outlined several major developments for the next 6–12 months:

• Savings V2: A cross-chain yield product exporting the Sky Savings Rate (currently 4.75%) to stablecoins like USDT, backed by Spark’s $3–4B liquidity layer.

• Institutional Fixed-Rate Lending: A new integration with Morpho V2 to offer fixed-rate loans—an in-demand feature for institutional treasuries.

• Spark Mobile App: Upcoming support for payments and card functionality, extending Spark’s reach beyond DeFi users.

• Stablecoin Liquidity as a Service: Expanding the PayPal model to other stablecoin issuers seeking to bootstrap deep on-chain liquidity efficiently.

As MacPherson noted, “Stablecoin lending isn’t an easy business.” Success requires distribution, infrastructure, and real partnerships. Spark’s model—pairing Maker’s credibility with a market-oriented commercial strategy—positions it as the institutional bridge between DeFi and traditional finance.

In essence, Sky mints stability; Spark deploys opportunity. Together, they form a vertically integrated ecosystem built for the next wave of institutional adoption.