PayPal launches PYUSD Savings Vault on Spark, bringing DeFi yields

PayPal officially launches PYUSD Savings Vault on the decentralized lending platform Spark, opening a new yield generation channel for stablecoin holders PYUSD. This vault is currently promoted with an annual yield of approximately 4.25%, comparable to other major stablecoin vaults such as USDC, USDT, and USDS from Sky ( previously MakerDAO ). The yield of the PYUSD Savings Vault is pegged to the Sky Savings Rate, with income derived from stable fee income on excess collateralized loans, real-world asset investments, and liquidity provision activities within the Spark ecosystem.

The new vault is part of Spark’s Savings V2 product line, utilizing Spark Liquidity Layer to allocate PYUSD deposits across Spark’s entire balance sheet, including lending strategies on SparkLend. According to the documentation, 90% of deposits will be allocated to yield-generating strategies, while the remaining 10% will be held as liquidity for instant withdrawals. Interest is accumulated through spPYUSD tokens issued to depositors. Currently, the vault’s asset allocation includes stablecoins, on-chain crypto lending, AAA-rated corporate debt, OTC crypto lending, and treasury bonds.

Previously, PYUSD was integrated into SparkLend from September, allowing users to deposit and borrow this stablecoin, with the shared goal of PayPal and Spark to raise total deposits to 1 billion USD. The launch of the Savings Vault is expected to further accelerate PYUSD’s growth in DeFi, as PYUSD reaches a market capitalization of approximately 3.8 billion USD after Paxos – the issuing partner – received a federal banking license in the US.