TLDR
- PayPal introduced the PYUSD Savings Vault on Spark, aiming to grow stablecoin deposits to $1 billion with a 4.25% APY.
- The vault uses Spark’s Liquidity Layer, allocating 90% of deposits to yield strategies and 10% to instant liquidity.
- Returns are anchored to the Sky Savings Rate, funded by revenues from overcollateralized loans and real-world asset investments.
- Asset allocation includes stablecoins, crypto lending, corporate debt, Treasurys, and OTC lending, with spPYUSD tokens tracking interest.
- PayPal’s PYUSD has $3.8B market cap, and Spark currently holds $150M in deposits and $67M borrowed, supporting DeFi expansion.
PayPal has launched the PYUSD Savings Vault on Spark’s decentralized platform, aiming to expand stablecoin deposits to $1 billion. The vault offers users a 4.25% APY using Spark’s Liquidity Layer for yield generation. This move follows PYUSD’s integration with SparkLend and reflects efforts to grow DeFi engagement.
PYUSD Vault to Generate Yield with Spark Liquidity Layer
The new Savings Vault deploys PYUSD deposits through Spark’s Liquidity Layer, allocating funds across the platform’s balance sheet. Around 90% of assets will enter yield strategies, while 10% remain liquid for instant withdrawals. Depositors receive spPYUSD, an accumulative token reflecting interest.
Spark stated the vault yield is anchored to the Sky Savings Rate, funded by Sky Protocol revenues. Sky collects fees from overcollateralized loans, real-world assets, and liquidity provisioning. Spark launched the product line under Savings V2, reaching $395 million TVL since October.
Spark’s site details the vault’s asset distribution, with over 57% held in stablecoins and 15.73% used for on-chain crypto lending. Additional portions include AAA corporate debt, OTC crypto lending, and Treasuries. Lending relies on blue-chip assets such as BTC, ETH, and LSTs.
PYUSD Integration Advances PayPal’s DeFi Position
In September, Spark integrated PYUSD into SparkLend, enabling users to borrow and supply the stablecoin. PayPal and Spark then outlined a joint goal to grow deposits to $1 billion. Initial deposits reached one-fifth of that target within 24 hours. Spark now reports $150 million in PYUSD deposits, earning 2.11%, and $67 million in borrowed funds. The vault aims to boost these numbers through new savings mechanisms.
Depositors can now earn returns while supporting Spark’s broader lending strategies. PayPal launched PYUSD in 2023 in partnership with Paxos, now under federal regulation. Paxos holds a U.S. federal banking charter, and PYUSD leads in oversight-compliant stablecoins. It currently holds a market cap of $3.8 billion.
SparkLend operates as a decentralized money market using Aave v3 infrastructure. It supports borrowing against crypto assets while facilitating stablecoin strategies. Spark’s expansion through Savings V2 positions it to attract institutional and retail participation. Spark documentation confirms that vault rates may vary based on liquidity strategies. Users can monitor returns through the Spark interface. Spark continues to refine its stablecoin offerings while collaborating with regulated issuers, such as PayPal.
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