Decentralized finance (DeFi) lending protocol Spark has shifted a portion of its treasury reserves from U.S. government bonds into crypto-native yield strategies, signaling a strategic evolution in onchain yield generation as Treasury returns continue to decline.
On Thursday, Spark announced that it allocated $100 million of its stablecoin reserves to Superstate’s Crypto Carry Fund (USCC), a regulated fund that earns yield from price differentials between spot and futures markets across major digital assets.
According to Superstate’s website, USCC manages around $528 million in assets and currently produces a 30-day yield of 9.26%.
Fund allows Spark to maintain exposure to yield opportunities uncorrelated with Federal Reserve rate policy. The move comes as the Federal Reserve continues to face challenges balancing inflation control with slowing economic growth.
Treasury yields fall as DeFi seeks alternatives
With the 10-year Treasury yield recently falling below 4%, DeFi protocols like Spark are increasingly motivated to diversify away from traditional yield sources. The Federal Reserve’s ongoing rate-cutting cycle could pressure stablecoin issuers and lending protocols that rely heavily on short-duration Treasurys.
Currently, Tether remains the largest crypto-native holder of U.S. Treasurys, with more than $100 billion in exposure, followed by Circle, which manages the U.S. dollar-backed stablecoin USDC. Together, both issuers hold over $132 billion in U.S. government debt, representing about 2% of the entire Treasury bill market, according to TD Economics.
Onchain yield evolves beyond passive income
Onchain yield has matured beyond simple lending and staking models to include complex, market-neutral, and restaking strategies, according to research from Galaxy Digital. These models focus on balancing liquidity, complexity, and risk in pursuit of higher, more sustainable returns.
While Treasurys still set the “risk-free floor” for DeFi returns, the ecosystem is rapidly exploring crypto-native yield sources including basis trading, validator rewards, and restaking mechanisms that remain uncorrelated with traditional monetary policy.
Spark’s investment in Superstate underscores a growing recognition across DeFi: to thrive, protocols must look beyond passive yield and toward diversified, data-driven income streams powered by onchain innovation.