Spark Pivots to DeFi Backend for PayPal, Robinhood Stablecoin Rails
In brief
- Spark shelved consumer app to focus on B2B infrastructure for fintech platforms
- Routed $1.5B in first 30 days; captured 30% of Uniswap stablecoin volume
- Robinhood Earn attracted $200M deposits in 24 days at ~7% APY on USDG
- PayPal partnership boosts PYUSD liquidity against USDT and USCS
From retail to infrastructure
Sam MacPherson, CEO of Phoenix Labs (which operates Spark), said shelving the consumer app was "definitely the correct decision." Consumer apps are "extremely hard to compete in," he said. The app would have placed Spark in direct competition with Coinbase, PayPal and Robinhood—entrenched players with distribution, trust, and billions in user capital.
Instead, Spark is supplying yield and liquidity to apps consumers already use. The strategy is working. Robinhood's Earn product launched with an APY of roughly 7% on USDG deposits and drew more than $200 million in deposits in the last 24 days, according to onchain data.
Stablecoin FX as the moat
PayPal teamed up with Spark to boost the liquidity of PYUSD as it competes with Tether's USDT and Circle's USDC. To do this, Spark migrated approximately $150 million into Uniswap v4 pools pairing USDS against USDT and PYUSD.
The infrastructure is designed for institutions to switch between stablecoins by concentrating liquidity in yield-bearing pools. Spark's stablecoin-to-stablecoin swap system accounted for approximately 30% of stablecoin-to-stablecoin swap volume on Uniswap and routed roughly $1.5 billion in its first 30 days.
The fragmented stablecoin market
Fintechs, exchanges and banking groups are increasingly launching their own dollar-linked tokens. PayPal has PYUSD. Robinhood is using USDG. Circle and Tether dominate legacy rails. This fragmentation creates both a problem and an opportunity: institutions need to move between stablecoins, but there's no unified FX layer.
Spark is building that layer. MacPherson projects onchain payments could reach $3 trillion by 2030. If that thesis holds, being the plumbing beneath the payments layer—rather than a consumer app fighting for wallet share—is the smarter bet.
