Summary
Ketju does not approve SparkLend: we have not verified the facts for any single reserve, though we found no flaw in the design. SparkLend is an Ethereum fork of Aave v3, with parameters set by Sky governance and unusually deep stablecoin liquidity supplied through Sky. A SparkLend supplier does not share pro-rata in the Spark Liquidity Layer’s CeFi or RWA book. Spark says assets supplied to a SparkLend reserve stay there. The SLL can add or remove its own liquidity, but it does not redeploy the client’s aToken claim. The risks are therefore the ones Aave carries: borrower bad debt, collateral and oracle failure, governance or upgrade action, and the cash available at withdrawal. DAI or USDS exposure adds the Sky balance sheet and peg. The design is credible, but a recommendation still needs a chosen asset and a live liquidity test at the position’s size, and a protocol-wide approval cannot replace them.
Review triggers
- Any selected reserve shows unresolved bad debt or an unbacked aToken balance, or fails a withdrawal of the proposed size
- USDS trades more than 1% off its peg for more than 24h
- Utilization above 90% for 30 days in the selected reserve, or an emergency freeze lasting more than 24 hours
- A selected collateral oracle runs without the documented multi-feed or ratio-killswitch protections
- Any unaudited upgrade to a custom oracle, rate strategy, cap automator, or pool implementation used by the selected reserve
Facts
- Verdict
- Not approved
- Type
- Dollar lending
- Chains examined
- Ethereum
- Instruments
- USDC, USDS, DAI, WETH
- Reviewed
- Last confirmed