DeFi platform Spark has indefinitely shelved its consumer application, shifting its strategy to a B2B2C model that supplies yield infrastructure to major tech and finance firms, CoinDesk reported on August 2. The move is a deliberate retreat from competing directly for retail users, instead positioning Spark as an invisible backend for products like Robinhood’s Earn vault, which holds $200 million in deposits and runs on the Morpho protocol with Spark as one of three collateral providers.
The decision echoes Robinhood’s broader public blockchain push, which increasingly blends brokerage services with crypto-native infrastructure, and highlights how fintech platforms are outsourcing DeFi components rather than building them in-house.
The Pivot: From Consumer App to Backend Infrastructure
Spark’s transition marks a stark revenue realignment. During the previous bull cycle, its consumer-facing app helped generate approximately $80 million in annual revenue, but the prolonged bear market shrank that figure to just $20 million. Sam MacPherson, CEO of Phoenix Labs, the development firm behind Spark, confirmed that the consumer product has been shelved indefinitely. In its place, over-the-counter (OTC) lending has become the fastest-growing line of business, now carrying $260 million in outstanding loans and targeting $1 billion by the end of 2026.
The platform’s infrastructure-first approach taps into a growing demand among exchanges, neobanks, and payment firms that need reliable, compliant yield sources without the cost and complexity of building their own DeFi stacks. By powering Robinhood’s Earn vault—a product that sits behind Robinhood’s simple user interface—Spark demonstrates how a DeFi protocol can operate as a largely invisible utility, much like cloud computing does for web applications.
Stablecoin Fragmentation and the Road to $1 Billion OTC Lending
Spark’s pivot comes as the stablecoin market enters a period of intense fragmentation. PayPal has PYUSD, Circle maintains USDC, and Tether continues to dominate with USDT, while Robinhood has joined the Global Dollar (USDG) consortium and is building its own blockchain. Each issuer aims to keep users, reserves, and transaction activity within its own network, creating walled liquidity gardens. MacPherson told CoinDesk that this fragmentation will only accelerate, and Spark is betting it can capitalize by acting as a neutral, on-chain capital allocator that bridges these disparate token ecosystems.
OTC lending, which typically involves large, negotiated loans between institutions, fits this thesis well. It allows Spark to serve deep-pocketed clients who need liquid capital across different stablecoin rails without forcing them onto a public-facing platform. If Spark reaches its $1 billion OTC loan portfolio by year-end, it would signal that the infrastructure model can not only replace but surpass the revenue potential of its former consumer app.
The arrangement also parallels a broader industry trend: DeFi protocols are increasingly choosing to become the “picks and shovels” rather than the storefronts. By embedding itself into Robinhood’s Earn product, Spark reaps usage and fees without bearing the cost of user acquisition, KYC compliance, or retail marketing—a trade-off that could define the next wave of DeFi business models.
