Sky earns revenue through stability fees from overcollateralized loans, investments in real-world assets, and liquidity provisioning in Spark.
Crypto News
PayPal has launched the PYUSD Savings Vault on decentralized lending platform Spark, offering stablecoin users a new method to generate yield on holdings.
The Spark website advertises 4.25% APY for the vault, matching returns on other stablecoin vaults for USDC, USDT, and Spark's native USDS token issued by parent organization Sky. Yield for the PYUSD Savings Vault is anchored to the Sky Savings Rate, funded by Sky Protocol's revenue.
Sky earns revenue through stability fees from overcollateralized loans, investments in real-world assets, and liquidity provisioning in Spark. The DeFi lending and liquidity protocol launched in 2024, offering yield-generating stablecoin Savings Vaults and the SparkLend decentralized money market.
PYUSD integrated into SparkLend in September, enabling users to supply and borrow the stablecoin. PayPal and Spark announced a goal to grow deposits to $1 billion after approximately $200 million was deposited within the first 24 hours.
Current figures show nearly $150 million PYUSD supplied, earning approximately 2.11%, with about $67 million borrowed, according to Spark's data. The new Savings Vault could accelerate deposit growth on SparkLend.
The vault utilizes the Spark Liquidity Layer, deploying stablecoin deposits across Spark's balance sheet, including lending strategies on SparkLend. Total value locked in Savings V2 vaults has grown to approximately $395 million since launching in October.
Ninety percent of deposits will be allocated through the Spark Liquidity Layer into yield-generating strategies. The remaining 10% stays in the contract as liquidity for instant withdrawals, according to documentation. Interest accrues to the spPYUSD accumulative token issued to depositors.
Current vault composition shows over 57% held in stablecoins, 15.73% directed toward on-chain crypto lending, 10.24% toward AAA corporate debt, 10.10% toward OTC crypto lending, 5.32% toward Treasurys, and the remainder in other investment strategies.
PayPal launched PYUSD in 2023 through a partnership with Paxos, which received a federal banking charter from the Office of the Comptroller of the Currency on Friday.
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