The layout of the parent project determines the ceiling of the sub-project Sky & Spark

Just saw that Sky announced a buyback of nearly 3 million USD for $sky

The reason I am optimistic about Spark is largely due to the parent project Sky. Today, I will talk about why. 📌 As usual, comment #spark and I will respond with more points

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Sky currently has an annualized revenue of 320 million USD, with a market cap of 2.5 billion USD. This market cap is basically undervalued in DeFi, and with the project team continuously buying back, $Sky has been performing well recently

In May, it bought back 7.75 million USD worth of $SKY, and at the beginning of June, there were several days of intensive buying. Rune himself used staking rewards to buy back over 60 million $SKY, spending nearly 5 million USD in total

These bought-back coins are then re-staked, continuously locked up. This cycle of staking + buyback + re-staking compresses the circulating supply

This logic also supports the fundamental basis for the positive cycle of USDS

#Spark has grown into an on-chain capital allocation engine under this framework

@sparkdotfi initially started as an experimental subDAO incubated within the Sky ecosystem, but later became an independent executive hub for capital management. Its role is not traditional lending but directly managing the large capital pool held by Sky, engaging in yield management and capital allocation across the entire chain

Currently, Spark's capital mainly flows into three areas:

One part is invested in DeFi, such as its own SparkLend, Morpho, and Pendle, among other mainstream protocols

Another part flows into CeFi and RWA, like Maple, Centrifuge, and BlackRock Treasury, which focus on real-world yield

And another part does Basis Trade during bullish market conditions, such as high-leverage arbitrage models like Ethena. In a bull market, it dares to take risks for high returns; in a bear market, it returns to CeFi and earns the spread from government bonds stably

Remember how Sky has been buying back? These buyback funds are locked up and staked again, producing $USDS steadily every day, using these stable returns to continuously buy back $SKY, re-staking, creating a snowball effect

With the parent project's framework opening up, the core focuses on credit expansion + capital allocation, circulating and growing in DeFi. As the execution layer for capital allocation, Spark's scale will only continue to grow as Sky's asset size increases, becoming the first truly respectable on-chain asset management system in DeFi

This is also why I am optimistic about Spark! Not only because of the support from @cookiedotfun @cookiedotfuncn’s list, but also because I am looking forward to Spark's own points airdrop

The possible window for token issuance is either the end of this month or next month, so if you haven't stored USDS yet, you should hurry. At the beginning of the month, I bought $eth for 2500, collateralized it to borrow USDS and earn interest, and also earned airdrop points, effectively getting three benefits at once～

#cookie #spark #sky #snaps

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