Dear Spark Community,

Below is the Q3 2025 financial report, covering Spark’s first full quarter under its own P&L.

1. Executive Summary

- The start of Q3 marked a pivotal moment for Spark, with the official launch of Spark’s P&L on July 1st, 2025. Prior to this, Spark operated under SKY, which covered all expenses while retaining the revenues generated by Spark
- At launch, Spark received an initial seed allocation of 25M USDS, establishing a robust foundation for future growth.
- During Q3 2025:
→ Gross revenue: $53.02M (aggregate returns across all product lines)
→ Gross profit / net revenue: $19.2M (gross returns less cost of capital)
→ Net profit: $12.12M (gross revenue less operating expenses)
→ Spark Protocol treasury (end of quarter): $38.8M

Spark closed Q3 in a strong financial position, with $53.01M in total earnings and $12.12M in net profit. The quarter reflected robust yield generation, efficient capital deployment, and continued growth across Spark’s core product lines.

2. Product Line Performance

Spark has a diverse set of product lines that stream revenue into the treasury.

These are (i) Spark Liquidity Layer (ii) distribution rewards (iii) SparkLend (iv) market curation (v) Treasury Management & Financial Operations.

2.1 Spark Liquidity Layer (SLL) The Spark Liquidity Layer is a  smart-contract system in which Spark deploys assets in a programmatic and non-custodial way into yield generating opportunities. Thanks to this sophisticated system, Spark is able to access competitive risk-adjusted returns in multiple chains in an efficient manner.

Revenue model: Spark earns revenue by capturing a spread between the investment’s APY and the SSL’s borrowing cost.

Q3 highlights: During Q3, Spark was able to capture the highest spread on the Morpho Spark USDC vault on Base, where it deployed $607M at it's peak to service Bitcoin-backed loans for Coinbase users and made $8.59M in gross revenue.

KPIs:

• Average deployment: $3.141B

• Average APY: 5.8%

• Gross returns: $44.03M

• Gross revenue: $10.21M

• Captured spread: 1.14%

2.2 Distribution Rewards Spark acts as SKY distribution agent, allowing users to get exposure to USDS, and the SKY savings rate,

Revenue model: Spark collects a 0.6% accessibility reward on all USDS routed through its distribution channels, via on-chain referral codes.

Q3 highlights: During Q3 Spark experienced a significant increase in USDS distribution, mainly through the Spark sUSDC vault. This distribution was amplified by integrations with other distribution channels and grants on a number of blockchains. Notably, sUSDC on Ethereum grew to $487M.

KPIs:

• Distributed supply at end of Q3: $682M

• Distribution reward rate: 0.6% APY

• Q3 revenue: $2.65M

2.3 SparkLend SparkLend is Spark’s native money market, operating as one of the largest and most secure lending platforms in DeFi, with only blue-chip collateral. It services institutional borrowers with the SLL as the primary lender.

Revenue model: Spark collects a reserve factor on interest accrued by borrowers.

Q3 highlights: In Q3, SparkLend expanded the SparkLend USDT and SparkLend pyUSD markets to $800M and $500M respectively, making SparkLend the second-largest USDT market on Ethereum and the largest pyUSD market.

KPIs:

• Total deposits: $7.35B

• Q3 revenue (reserve factor on yield, excluding SLL): $305.5k

2.4 Market Curation Spark is one of the largest curators in DeFi, curating vaults across Ethereum and Base (USDS, DAI, USDC) and directing liquidity into high-quality collateral markets. By curating markets, Spark ensures efficiency, depth, and security for lenders and borrowers.

Revenue Model: Spark collects a reserve factor on all interest accrued within its curated markets. This share of borrower interest flows directly to Spark’s revenues.

Q3 highlights: During Q3, Spark became the #1 curator in DeFi, taking the top spot on the Morpho leaderboard. Spark also positioned itself to potentially qualify for the Morpho Olympics, which should grant incentive packages.

KPIs:

• Total Curated Value (end Q3):$799.5M

• Q3 revenue (curator fee): $176.5k

2.5 Treasury Management & Financial Operations

Spark’s treasury is the DAO’s operational capital. It both pays for the operational expenses as well as acts as junior capital required by SKY to fulfill the risk-required capital needs for accessing the SKY credit line.

Revenue model: Spark is able to monetize the assets in the treasury through SKY’s savings rate and other financial operations.

Q3 highlights: During Q3, Spark realized $861.6k in net positive returns.

3. Consolidated P&L

Summary of Spark’s total revenues, costs, and net results across all product lines for the quarter. It combines investment returns, treasury operations, distribution rewards, SparkLend reserve factor, net of the cost of capital, curator fees, grants and operating expenses, to show Spark’s overall profitability.

4. Consolidated balance sheet

Snapshot of all assets held by Spark at quarter-end, expressed in USDS terms across treasury and deployed positions.

5. Quarterly Insights and Commentary

Growth drivers
Q3 marked a period of strong expansion for Spark, driven by new integrations and deeper capital deployment across its core markets. Spark integrated PayPal’s PYUSD on SparkLend and the SLL and grew deposits in SparkLend to $500M, reaching a peak SparkLend allocation of $1.52B. The expansion of the USDT market to $550M enabled a new class of institutional borrowers to operate on SparkLend and broadened the SLL’s investable universe.

A key revenue driver, and where Spark captured its largest spreads, were the DAI and USDS Morpho vaults, along with the syrupUSDC allocation, which increased to $630M during the quarter.

Challenges
The crypto market experienced heightened volatility throughout Q3. While Spark captured strong yields during the first half of the quarter, market conditions softened in the second half, leading to a moderation in returns. Despite this, Spark remains well positioned to benefit from a potential market rebound, with a diversified portfolio, active liquidity management, and conservative risk parameters ensuring resilience across market cycles.

Risk management
Spark prioritized security and capital preservation. This is reflected on SparkLend’s high-quality asset composition, and the SLL’s deployment, which remained mostly allocated to over-collateralized onchain loans, in both SparkLend and Morpho deployments

All deployments and asset listing are thoroughly screened for institutional-grade standards. The Spark Liquidity Layer operates through audited, non-custodial smart contracts, ensuring transparent and programmatic capital deployment. Spark grew its treasury to $38.8M, which serves as junior capital for the system.

6. Appendix

Spark addresses:

• Spark Treasury: 0x3300f198988e4C9C63F75dF86De36421f06af8c4

• Spark Liquidity Layer:

  • Ethereum: 0x1601843c5e9bc251a3272907010afa41fa18347e

  • Base: 0x2917956eFF0B5eaF030abDB4EF4296DF775009c

  • Unichain: 0x345E368fcCd62266B3f5F37C9a131FD1c39f5869

  • Arbitrum: 0x2B05F8e1cACC6974fD79A673a341Fe1f58d27266

  • Optimism: 0xe0F9978b907853F354d79188A3dEfbD41978af62

Dune queries: https://dune.com/sparkdotfi/spark-accessibility-rewards

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