Spark, a decentralized asset allocator built by core contributors from Phoenix Labs, has launched a new lending suite aimed at channeling decentralized finance (DeFi) stablecoin reserves into institutional credit markets. The suite, announced on Wednesday, consists of two products: Spark Prime and Spark Institutional Lending.
Spark Prime offers margin-style lending and off-exchange settlement powered by Spark's liquidity engine. Spark Institutional Lending integrates Spark-governed markets with qualified custodians like Anchorage Digital, allowing clients to keep collateral within regulated custody while accessing loans. Early launch partners for Spark Prime include Edge Capital, M1, and Hardcore Labs.
Sam MacPherson, Co-founder and CEO of Phoenix Labs, revealed significant early traction. He stated that Institutional Lending already has around $150 million in commitments, with the capacity "to scale to billions over the coming months." Spark Prime is starting with approximately $15 million and will ramp up more slowly as key safety features are deployed.
The launch builds on Spark's existing partnerships with major industry players. The platform supplied over 80% of the USDC liquidity for Coinbase's Bitcoin-backed loan market on Morpho, helping drive roughly $500 million in loan growth in its first three months. Public dashboards show Spark-linked vaults have deployed more than $600 million to that market. Additionally, PayPal's PYUSD stablecoin program has utilized about $500 million in Spark-governed liquidity to deepen onchain markets.
According to DeFi Llama, Spark's total value locked (TVL) currently stands at $5.24 billion, down from a November 2025 high of $9.2 billion, placing it among the larger DeFi money market platforms. For context, Aave leads with $27 billion TVL, while Maple sits at $2.1 billion.
The news highlights the resilience of DeFi infrastructure amid a broader market downturn. While the overall DeFi TVL has fallen about 20% from $120 billion at the end of January 2026 to $96.52 billion, this decline is less severe than the drops in major cryptocurrencies. Over the same period, Bitcoin fell roughly 25% from $89,000 to around $66,800, and Ether declined around 35% from $3,000 to roughly $1,950.
MacPherson emphasized a key advantage of Spark's model: "anyone can evaluate the full portfolio in real time," enabling institutions to underwrite against their own risk limits and exit if the profile does not align with their controls.
