Spark now supplies more than $400 million in USDC to the cbBTC/USDC lending market on Base, making it the source of nearly a quarter of all USDC in that market, according to research data and Spark's public figures.
Spark is the allocation layer of the Sky ecosystem. It routes capital through a dedicated Morpho USDC Vault, which in turn supplies the cbBTC/USDC market. The vault has allocated more than $410 million into that single market, according to the research data, while Spark's own public figure describes the total as over $400 million and nearly a quarter of the market's USDC.
Market scale and utilization
The cbBTC/USDC market holds approximately $1.77 billion in total supplied assets, with $1.60 billion borrowed. That places utilization above 90%, meaning almost every dollar deposited by lenders is already out on loan.
Spark adjusts its USDC reserves to track borrowing needs, according to the research findings. Its allocations began modestly and grew rapidly.
How the isolated market works
The market runs on Morpho as an isolated lending market, meaning risk stays within this single pairing. Problems with an unrelated asset elsewhere on Morpho do not spill into it, according to the source material.
The market launched on September 4, 2024, and uses an 86% liquidation loan-to-value ratio, or LLTV. That threshold sets the liquidation line: if a borrower's debt reaches 86% of the value of their cbBTC collateral, the position becomes eligible for liquidation.
Rates cool as competition grows
Lending rates have eased as competition for lending activity has picked up. Lenders currently earn a supply APY of about 4.73%, while borrowers pay around 5.26%. Earlier, rates sat near 7.5%. The spread between supply and borrow rates is now a little over half a percentage point.
The market has also recorded a 55% rise in volumes year-to-date, according to the research data.
Coinbase connection
In January 2025, Coinbase introduced Bitcoin-backed loans that let users borrow USDC against cbBTC directly inside the Coinbase app. Users do not need to open a separate DeFi interface, and the borrowing takes place on Morpho in the background.
The research findings describe Spark as a primary liquidity provider tied to that Coinbase lending launch. When a Coinbase user borrows USDC against Bitcoin, there is a decent chance some of those dollars came from Spark's vault, according to the source material.
Concentration and liquidation risk
For other lenders, the decline in supply APYs from around 7.5% to about 4.73% shows that large suppliers can compress returns across the pool. Concentration is also a risk to watch: when one supplier provides nearly a quarter of a market's USDC, its allocation decisions carry significant weight.
The 86% LLTV permits relatively aggressive borrowing against Bitcoin. A sharp drop in Bitcoin's price could push many positions toward liquidation at once, according to the source material.
Coinbase provides the front end and the users, Morpho provides the lending rails, and suppliers such as Spark provide the dollars. The key metrics going forward are utilization, the spread between supply and borrow rates, and Spark's share of the pool.
