On-chain liquidity DeFi new star? Understand the newly launched Spark in three minutes.

The first phase of the Ignition airdrop tokens is now available for claiming, with a deadline of July 22, 22:00 Beijing time.

Written by: 1912212.eth, Foresight News

On June 17, exchanges such as Binance, OKX, Bybit, Bitget, and Bithumb announced the launch of Spark (SPK) spot trading. In the current market where liquidity is becoming increasingly tight, it is rare for projects to quickly land on major exchanges. So, what exactly is the much-discussed Spark project?

On-chain Liquidity Protocol

Spark is the liquidity and yield infrastructure layer for on-chain finance. Since the birth of DeFi, the crypto market has faced a persistent structural problem: liquidity is highly fragmented and yields are unstable. Although DeFi has developed over the years, this issue remains unresolved. Spark acts as an on-chain asset allocator, borrowing from Sky's stablecoin reserves worth over $6.5 billion and deploying capital into DeFi, CeFi, and RWA. Spark provides stable liquidity to the market while achieving large-scale risk-adjusted returns.

The core key of Spark is its Liquidity Layer (Spark Liquidity Layer, abbreviated as SLL), which can automatically provide liquidity for USDS, sUSDS, and USDC directly from Sky across various blockchain networks and DeFi protocols. This allows users to easily earn Sky savings rates using sUSDS on their preferred networks. Additionally, it enables Spark to automatically provide liquidity to the DeFi market to optimize yields.

SLL utilizes the Sky Allocation System to provide liquidity for USDS, sUSDS, and USDC across various networks and DeFi markets. It mints USDS and sUSDS through Sky Allocator Vaults and bridges them to other networks using SkyLink. The minted USDS is also exchanged for USDC through the Sky Peg Stability Module and then bridged to other networks using the Circle cross-chain transfer protocol. The bridged USDS, sUSDS, and USDC can be deposited into liquidity pools, DeFi protocols, lending markets, or other yield strategies on the target chain.

Sky aims to keep 25% of the USDS reserves in cash reserves, primarily USDC, to ensure the liquidity and stability of USDS. SLL brings this liquidity from the Ethereum mainnet to supported networks. Therefore, users can easily access ample liquidity, allowing them to convert USDC to sUSDS and vice versa. This ensures that the stability of USDS, the yield of sUSDS, and the liquidity of the Sky Peg Stability Module benefit the entire DeFi ecosystem across all supported networks.

Currently, the protocols supported by SLL include SparkLend, Aave, Morpho, and Curve, with supported chains including Ethereum mainnet, Base, Arbitrum, Optimism, and Unichain.

The core team of the Spark protocol has been deeply involved in the crypto space for many years. The core member is Lucas Manuel, co-founder of Phoenix Labs, a research and development company specializing in DeFi protocol smart contract development. Previously, he was the SC technical director at Maple Finance. Another core contributor is Nadia, also a co-founder of Phoenix Labs, who was previously responsible for Sky ecosystem growth.

The last key member is Kris Kaczor, who is also a co-founder of the data website l2beat.com. Kris is also an engineer at Phoenix Labs, and in his Twitter bio, he describes himself as proficient in JavaScript and Klingon (a fictional alien language from the sci-fi series "Star Trek").

Token Economics

SPK is the native token of Spark, with a total supply of 10 billion tokens, which will be distributed over the initial 10 years.

The supply distribution of SPK is as follows:

65% allocated to Sky — for SPK mining over 10 years (for users);
23% allocated to the ecosystem;
12% allocated to contributors;

Sky mining (65%) — The 6.5 billion tokens allocated to Sky will be distributed to users through genesis mining, with the distribution rate gradually decreasing over time.

Year 1 - 2: 1.625 billion tokens per year;
Year 3 - 4: 812.5 million tokens per year;
Year 5 - 6: 406.25 million tokens per year;
Year 7 - 10: 203.13 million tokens per year;
Currently, the Sky mining feature has not been launched.

Ecosystem (23%) — The 2.3 billion SPK tokens allocated to the Spark ecosystem are intended to promote ecosystem growth. Of these, 17% of the tokens will be available at TGE, while the remaining portion will be unlocked one year later. A portion of this 23% allocation will also be distributed to the Spark community through the Ignition airdrop program. 1.2 billion SPK tokens are allocated to the core contributors of Spark to align their long-term incentives with the construction and support of Spark. These tokens will unlock 25% after a 12-month lock-up period, with the remaining portion unlocking over the next three years.

The official statement indicates that current SPK holders will be able to participate in the future governance of Spark and stake SPK to earn Spark Points rewards. Future staked SPK may be used to secure the protocol.

Airdrop Eligibility

According to the official website, Spark has a total of 4 airdrop events: Pre-Farming, Ignition, Overdrive, and Layer3. The distribution for Pre-Farm users is as follows: The first season is from August 20, 2023, to May 20, 2024, with a total of 130,434,783 SPK allocated. The second season funding pool (from May 20, 2024, to June 16, 2025):

SparkLend: 14,478,261 SPK per month

Aave: 7,239,130 SPK per month

This airdrop belongs to the Ignition airdrop portion, totaling 300 million tokens, with the first phase of tokens now available for claiming, and the deadline is July 22, 22:00 Beijing time. Any tokens that remain unclaimed at the end of the Ignition claim period will be distributed according to the Overdrive rules during the Overdrive airdrop event.

Stablecoin Holdings

Hold USDS, sUSDS, sUSDC, sDAI, or SAI

On any snapshot date, the total holdings of any of the above tokens must reach at least $1,000

Snapshot dates: April 15, 2023, April 15, 2024, April 15, 2025 - all at 23:59:59 UTC

Eligible chains: Mainnet, Base chain, Arbitrum chain

xDAI Holdings

On any snapshot date, hold at least 1,000 xDAI

Snapshot dates: April 15, 2023, April 15, 2024, April 15, 2025 - all at 23:59:59 UTC

Eligible chains: Gnosis

DAI Holdings

On any snapshot date, hold at least $10,000 in DAI

Snapshot dates: April 15, 2023, April 15, 2024, April 15, 2025 - all at 23:59:59 UTC

Eligible chains: Mainnet, Base, Arbitrum, Optimism, Polygon

SparkLend Activities

SparkLend Deposits

Deposit more than $100 into SparkLend in a single transaction

Deadline: On or before April 15, 2025, 23:59:59 UTC

Eligible chains: Mainnet, Gnosis

Lending Platform Activities

Aave Lending

Accumulate at least $5,000 in borrowing across USDS, sUSDS, USDT, USDC, USDe, sUSDe, DAI, or sDAI