
Sam MacPherson|Feb 24, 2025 19:59
One of the biggest issues of Ethereum is liquidity fragmentation. The UX is not great when people want to trade, lend or borrow.
While solutions like AggLayer and Superchain will improve this, Spark is uniquely positioned to solve this in the next 3 months.
Here's how:
1. USDC stablecoin injection
Sky is the largest holder of USDC on Ethereum mainnet at around 3.3b USD. Spark can now programmatically deploy this to all major lending markets on Ethereum, Base and soon Arbitrum.
This system will automatically rebalance across all lending markets on all chains. What this means is users no longer need to worry about liquidity. They can borrow USDC from their favorite lending markets, and this system will move money around on the next block to keep the interest rate the same.
The automated system will even rebalance the USDC cross-chain via Circle CCTP.
While the system is already in a beta rollout, the fully automated system will go live on SparkLend, Aave, Morpho and Fluid in the next few weeks.
2. USDT stablecoin injection
Tether recently announced USDT0 which is CCTP's parallel for USDT. Spark will soon onboard USDT in the same way it supports USDC.
This will solve liquidity fragmentation for USDT on all supported chains. Again, users can borrow USDT from their favorite chain and lending market, and this system will ensure liquidity to keep the rates balanced.
3. Universal savings product
Lenders have similar problems where they need to hunt around for the highest rate. Although Spark cannot guarantee the best rate for small amounts, it can provide the best high-scale, cross-chain rate.
Savings USDS exports the aggregated cross-chain yield to all chains. This means that holders of USDC (and soon USDT) can deposit in size into the savings product on any chain they prefer. Spark will ensure 24/7 liquidity to allow people to exit whenever they like.
The yield for savings is the same battle-tested system that has been running for years generating yield for sDAI and now sUSDS. It is comprised mostly of crypto over-collateralized vaults against ETH and BTC + tbills.
Spark currently supports Ethereum, Base, and, as of this week, Arbitrum. People can deposit into sUSDS from their stablecoins and start earning the best market rate of 6.5% at any size.
4. DEX liquidity amplification
Modern lending markets like @0xfluid allow stablecoin liquidity injection to amplify DEX LP returns with the same capital. This will drastically improve liquidity between stablecoins and non-correlated pairs.
This will be rolled out on Base with Spark directly minting sUSDS into the Fluid market. DEX LPs can leverage their position to improve capital efficiency with non-correlated pairs.
Fluid has already proven itself by taking a sizable portion of the DEX trading volume on Ethereum due to capital efficiency improvements by combining the DEX and lending liquidity.
---
What all this means is that the experience on Ethereum and L2s is about to get a lot better very soon. Hunting around for liquidity will become a thing of the past, and the L2 roadmap can continue scaling Ethereum without sacrificing UX.
LFG Together
Share To
HotFlash
APP
X
Telegram
CopyLink