Spark launches new Prime and Institutional Lending platforms to expand DeFi stablecoin access for institutional investors across the United States

In a move set to expand the reach of decentralized finance into institutional markets, Spark unveiled two new offerings on Wednesday: Spark Prime and Spark Institutional Lending.

The new platforms aim to make it easier for large financial players to tap into stablecoin loans without running their own DeFi operations.

Spark, whose core contributor Phoenix Labs helped shape MakerDAO’s stablecoin and risk frameworks, sees the launch as a natural evolution of its liquidity infrastructure.

“We want to connect institutional players directly to DeFi liquidity in a safe and regulated way,” said Sam MacPherson, co-founder and CEO of Phoenix Labs.

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How Spark Prime and Institutional Lending Work

Spark Prime functions as a margin-style lending platform that settles off-exchange while leveraging Spark’s liquidity engine.

It allows institutions to borrow stablecoins with relative simplicity, cutting out the need to run complex DeFi smart contracts themselves.

Early partners include Edge Capital, M1, and Hardcore Labs.

Meanwhile, Spark Institutional Lending integrates Spark-governed markets with qualified custodians like Anchorage Digital, letting clients keep collateral in regulated custody.

MacPherson noted that the institutional lending side already has about $150 million in commitments, with room to scale into the billions as the infrastructure matures.

Spark Prime, by contrast, is starting more cautiously with $15 million, as safety features are gradually rolled out.

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Spark’s Role in Onchain Liquidity

Spark’s influence in DeFi goes beyond its own platforms.

According to data from DeFi Llama, Spark currently manages about $5.24 billion in total value locked (TVL), down from a peak of $9.2 billion in November 2025.

While this places Spark among the larger DeFi money markets, it still trails Aave, which leads with $27 billion, and sits well above Maple at $2.1 billion.

The company has provided significant liquidity for Coinbase’s Bitcoin-backed loan market on Morpho, reportedly supplying over 80% of USDC liquidity, helping drive around $500 million in loan growth in the first three months.

Similarly, PayPal’s PYUSD stablecoin program has tapped Spark liquidity, using about $500 million to boost onchain markets for PYUSD and other stablecoins.

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DeFi Shows Resilience Amid Market Volatility

Despite the recent crypto selloff, Spark sees opportunities for institutional adoption.

The overall DeFi TVL has declined to $96.5 billion from roughly $120 billion at the end of January, a 20% drop, while Bitcoin and Ether have fallen 25% and 35%, respectively.

MacPherson highlighted the transparency advantage of Spark’s model: “Anyone can evaluate the full portfolio in real time.

Institutions can underwrite the books against their own risk limits and exit if needed,” he said.

He added that Spark’s design makes it easier for traditional financial players to engage with DeFi without taking on unnecessary operational risk.

 Spark is trying to bridge the gap between the wild west of decentralized finance and the regulated world of institutional finance.

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Why This Matters

With banks, asset managers, and fintech firms increasingly exploring DeFi, Spark’s launch signals a maturation of the market.

Platforms like Spark Prime and Institutional Lending could serve as a model for how decentralized liquidity can coexist with regulated financial systems.

By offering custody options, risk transparency, and integration with traditional finance partners, Spark hopes to normalize institutional participation in DeFi.

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What’s Next?

Spark plans to gradually scale both platforms, starting with the current liquidity commitments and adding safety features and new integrations.

Partnerships with major custodians and onchain markets will likely expand, and observers expect Spark to become a key conduit for stablecoin lending to institutions.

Analysts are watching how Spark’s approach could shape the future of DeFi lending and influence other platforms aiming for institutional credibility.

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Summary

Spark’s new Prime and Institutional Lending platforms aim to make DeFi liquidity more accessible for institutional players, offering margin-style loans, regulated custody, and interoperability with major stablecoin markets.

With backing from Phoenix Labs expertise and early commitments exceeding $150 million, Spark hopes to scale its offerings into the billions while navigating a volatile crypto environment.