How to Use SparkFi: Full Breakdown of Saving, Borrowing, and Liquidity Modules
In our previous article ( ), we explored the overall positioning of SparkFi ( @sparkdotfi ) as more than just a lending protocol ā itās a decentralized capital coordination center. This ācoordination abilityā is delivered through its three core modules:
Saving, Borrowing, and the Liquidity Layer
Letās dive deep into how each module works, what value it offers, and why Spark stands out in the DeFi landscape.
1. Saving Module: Foundation for Stable Yield
Spark offers a simple yet efficient way to earn passive income. Users can deposit DAI or USDC into Sparkās saving vaults and earn stable yields (around 4.5% APY).
ā
Key Features:
(1) No risk entry ā no collateral or leverage required
(2) Transparent and stable rates governed by the Sky DAO
(3) Yield is generated through MakerDAOās DSR and Sparkās liquidity reallocation
Best for: Users who want a simple ādeposit and earnā experience without active management.
2. Borrowing Module: Collateral-Backed Loans with USDS
One of Sparkās core features is collateralized borrowing. Users can supply blue-chip assets to borrow USDS, Sparkās native stablecoin.
Accepted Collateral Types:
(1) ETH, stETH, cbETH, rETH, wstETH (Ethereum-based LSD assets)
(2) MKR (governance token)
(3) DAI (Maker ecosystem stablecoin)
Borrowed Asset: USDS
Key Features:
(1) Collateral ratios and liquidation thresholds are governed by Sky DAO
(2) Lower borrowing costs compared to Aave, tailored for long-term asset holders
(3) Liquidation handled by Chainlink Oracles or equivalent systems
Best for: Users with long-term LSD or blue-chip holdings who need stable liquidity.
3. Liquidity Layer: Capital Routing Logic for DeFi
This is what truly differentiates Spark from other platforms. Spark doesnāt just manage internal liquidity ā it routes surplus DAI/USDC to external protocols like Aave V3 across multiple deployments.
The logic: you deposit stablecoins into Spark, and Spark selectively allocates part of that capital to external markets, generating additional yield ā which is returned to you.
Current integrations include:
(1) Aave Prime
(2) Aave Core
(3) Aave Base
How It Works:
(1) Spark evaluates risk and deploys excess capital where yield is optimal
(2) Yield generated is redistributed back to users
(3) All flows are fully transparent and traceable on-chain
Best for: DeFi-native users who prioritize long-term capital efficiency through composability and protocol-level yield.
4. Combined Strategies: Looping to Maximize Yield
Saving Strategy
(1) Action: Deposit DAI / USDC
(2) Risk Level: Very Low
(3) Yield: ~4.5% stable APY
Borrowing Strategy
(1) Action: Supply ETH or LSDs ā borrow USDS
(2) Risk Level: Medium (volatility + liquidation)
(3) Yield: Unlocks liquidity for other uses
Loop Strategy
(1) Action: Deposit + Borrow + Re-deposit
(2) Risk Level: Medium-High
(3) Yield: Maximized through compounding and leverage
Strategy Overview: Spark Use Cases by Risk & Return
Example Strategy:
(1) Deposit wstETH as collateral ā borrow USDS
(2) Deposit USDS into Sparkās Saving Vault
(3) Earn stable yield while retaining your ETH exposure
This is a classic DeFi loop strategy to optimize both leverage and yield.
5. How Spark Compares to Aave / Compound
Product Design
(1) Spark: Combines saving, lending, and external capital routing
(2) Aave/Compound: Primarily lending-focused protocols
Capital Utilization
(1) Spark: Actively deploys excess funds into external protocols like Aave
(2) Aave/Compound: Funds stay within the protocol
Yield Model
(1) Spark: Governed interest rate model tied to DSR, not fully market-driven
(2) Aave/Compound: Fully supply-demand market-based rate dynamics
Ecosystem Support
(1) Spark: Backed by MakerDAO and Sky Protocol
(2) Aave/Compound: Run by independent protocol communities
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Whatās Next: $SPK Token and Airdrop Strategies
Now that you understand Sparkās architecture and modules, our next article will explore:
(1) Has the $SPK token launched?
(2) How does the current āairdrop seasonā work?
(3) What strategies are best for earning governance rewards?
Stay tuned.

Getting Started with #SparkFi: A DeFi Hub for Lending, Earning, and Capital Coordination
In May 2025, ( @cookiedotfun ) launched its first official partner project ā ( @sparkdotfi ), instantly attracting the attention of airdrop hunters and DeFi enthusiasts alike. But what exactly is Spark? How is it different from traditional lending platforms? And why was it chosen as Cookieās debut highlight?
This article walks you through everything you need to know about ā its positioning, background, current metrics, and future potential.
1. What is ?
Put simply, Spark is a decentralized capital coordination platform. It aggregates stablecoin savings, lending, and liquidity deployment ā enabling users to earn yield, access leverage, and benefit from protocol-level capital efficiency.
But Spark isnāt just another lending protocol. Itās designed as a DeFi coordination hub, offering composable yield opportunities with flexible collateralization. For example:
(1) Users can deposit USDC or DAI and earn stable yields (~4.5% APY);
(2) Or use ETH, wstETH, rETH, and similar assets as collateral to borrow USDS stablecoins;
(3) Spark routes idle funds to other protocols like Aave, boosting overall yield efficiency.
This hybrid model places Spark somewhere between Aave and Morpho Blue ā positioning it as a ācapital allocatorā on-chain that balances yield, risk control, and liquidity optimization.
2. Whoās Behind Spark?
Spark isnāt just another new protocol ā it was initiated by Sky Protocol, one of the major extensions of the MakerDAO ecosystem.
In fact, Spark is a core infrastructure product from MakerDAO, and closely tied to the $DAI ecosystem. Highlights include:
(1) Yield mechanisms linked to DAIās Savings Rate (DSR);
(2) Governance design inspired by MakerDAOās governance principles;
(3) Shared architecture with Makerās internal asset allocation systems;
In terms of funding, the Sky ecosystem has raised over $61.5M USD from top-tier VCs like a16z and Paradigm.
While Spark has not yet launched its own token, the team has confirmed plans to release $SPK governance tokens, with early user activity playing a role in future airdrop allocations.
3. How is Spark Performing?
As of late May 2025, has posted some impressive metrics:
š¹ Total Value Locked (TVL): Over $2.6 billion
š¹ Savings Vault TVL: ~$1.5B (primarily DAI and USDC)
š¹ Collateral assets supported: ETH, wstETH, rETH, cbETH, and more
š¹ Integrated with Aave: Spark deploys capital into Aave markets to improve capital efficiency
š¹ Security audits: Completed by ChainSecurity and Cantina, with an active bug bounty program in place
These numbers demonstrate that Spark is no longer an experimental protocol ā it has matured into a mainstream DeFi infrastructure layer.
4. Why Should You Pay Attention?
(1) It represents the evolution of āclassic DeFiā
Spark is a product of MakerDAOās next chapter ā with deep liquidity, reliable governance, and stable assets. In a world filled with unaudited new protocols, Spark stands out as a ācredible DeFiā platform.
(2) choice of Spark says a lot
For a rising Web3 content incentive platform, choosing Spark as its first collaboration shows a commitment to high-quality, long-term value ā not just hype or memecoins.
(3) It supports both ālow-effortā and āpower userā engagement
Whether youāre a casual user posting to earn Snaps, or a DeFi power user seeking meaningful interaction, Spark has something for you ā from zero-cost participation to deep lending strategies.
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š Coming Next: How to Use Sparkās Core Modules?
In our next article, weāll break down the actual mechanics of Spark, including:
(1) How is yield calculated and distributed?
(2) How can users participate ā via āzero farmingā or āreal capital deploymentā?
(3) What are Sparkās unique innovations compared to other DeFi lending protocols?
Stay tuned.

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