Financials

Overview

Lending Markets

Interest on Spark loans accrues continuously, but is only received when a borrower makes a repayment toward their outstanding position. At any given point there can exist a balance of interest that has been accrued but not repaid. 

Since interest accrues in the background and interest accrued over a long period can be repaid all at once, some periods have repayent spikes larger than the interest accrued over the same period. 

Interest Accrued vs Interest Received

Spark: Interest Collection

Most of the interest generated through lending operations is passed through to depositors. Spark takes a small percentage of interest generated to fund its reserves. 

Interest accrued through lending activity 

Spark: Interest Generated

Spark collects a small portion of interest accrued to fund it's reserve. Each asset has its own reserve ratio which determines the cut of total interest accrued that is collected for the reserve, the remaining interest is distrubited to depositors. 

Net interest revenue is the amount that is allocated to the reserve. 

Portion of interest accrued that is added to Spark's reserve. 

Spark: Net Interest Revenue

NIM measures how profitably the protocol earns its lending spreas over its capital base. A higher NIM means the protocol is capturing more of the interest charged to borrowers, after covering depositor yields, per dollar of assets deployed. It's the protocols core "spread" return, directly comparable to banks' lending margins. 

Net interest income / average interest bearing assets

Spark: Net Interest Margin (NIM)

Spark collects fees for flash loans (currently set to 0) and liquidations.

Flash loan and liquidation fees. 

Spark: Non-Interest Income

In Spark interest accrues continuously in the pool but is only realized upon loan repayment. Interest receivable tracks the total value of interest that has accrued but has yet to be repaid, the difference between cumulative interest accrued and cumulative interest received. 

Value of Accrued Interest that has not Been Repaid

Spark: Interest Receivable

Net interest income collected for the reserve over the past 30 days. 

Spark: Recent Reserve Revenue

Spark pays Aave DAI on a quarterly basis for using Aave V3 code. These payments are made by minting DAI directly to the Aave collector address. 

Quarterly royalties paid to Aave for code licensing. 

Spark: Non-Interest Expenses

F indicates a linear forcast for the rest of the period. 

- **Net Interest Revenue** is the total interest income less interest expenses. Interest income is generated through lending operations, and interest expenses are a portion of incoming interest paid out to depositors. 

- **Non-Interest Income** is made up of various fees charded to users for interacting with the protocol: 

  - **Flash Loan Fees:** Fees charged to the user for a flash loan. Currently flash loan fees are set to 0%. 

  - **Liquidation Fees:** Fees charged to liquidators when liquidating a position, equal to a percentage of the value of collateral seized in the liquidation. 

- **Non-Interest Expenses** 

  - **Code Licensing:** Spark pays Aave quarterly royalties for licencing Aave V3 code. 

  - **Liquidation Loss:** Losses incurred when the liquidated loan value falls below the value of underlying collateral. 

- **Total Revenue:** Net Interest Income + Non-Interest Income 

- **Total Expenses:** Total Non-Interest Expenses (Interest expenses are netted out in Total Revenue)


Spark: Lending Income Statement

**Total Assets:** 

- **Available Liquidity:** Total available liquidity available to be loaned out, currently used as collateral, or available to be used as collateral. 

- **Loans:** Total value of outstanding loans. 

- **Reserve:** Reserves are assets owned by Spark in reserves. 

- **Treasury:** Assets held in the Spark Treasury. 

**Total Liabilities:** 

- **Deposits:** Total value of deposits received by users. 

**Total Equity**

Spark: Lending Balance Sheet

**Deposits:** Total value of assets deposited into Spark, plus interest accrued.

**Loans Collectible:** Total value of outstanding loans, plus interest accrued on positions. 

**Reserve:** Total value of assets held in the reserve. 

**Treasury:** Total value of assets held in the treasury address. 

**Available Liquidity:** Total value of collateral and remianing supply available to be borrowed. 

**Equity:** Total assets minus total liabilities.

SparkLend balance sheet over time. 

Spark: Lending Balances

F incidates a linear forecast for the remainder of the current period. 

- **Operating Cash Flows:** 

  - **Operating Cash Inflows:** The total amount of interest received and fees collected throughout the period. 

  - **Operating Cash Outflows:** The total amount of interest paid to depositors and payments for Aave V3 code licencing. 


Spark: Lending Cash Flows

Total value of interest accrued through lending operations. Equal to the sum of interest paid to depositors and interest cut collected for the reserve.

Interest accrued through lending activity broken down by token. 

Spark: Interest Accrued by Token

Interest accrued over the last 30 days.

Spark: Recent Interest Accrued

Includes all reoccuring sources of revenue generated through lending operations, including net interest income, flash loan fees, and liquidation fees. 

Markets

Sectors

Layer 1

Layer 2

Finance

Consumer

Chain Clusters

ETFS

Spark: Financials