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PayPal expands PYUSD into DeFi with 4.25% savings vault on Spark

Written by Isaac FrancisPublished dez. 19 2025Last Updated dez. 19 2025

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PayPal has launched a new PYUSD Savings Vault on the decentralised lending platform Spark, offering users a listed annual percentage yield of 4.25%.

The vault allows holders of PayPal’s dollar-backed stablecoin to earn on-chain yield through Spark’s existing liquidity and lending infrastructure.

Spark’s website shows the PYUSD vault offering yields comparable to other major stablecoin products linked to USDC, USDT and Spark’s USDS token.

Returns from the vault are tied to the Sky Savings Rate, which is funded by revenue generated across the Sky Protocol ecosystem.

Sky earns income from stability fees on overcollateralised loans, real-world asset investments and liquidity operations managed through its Spark subDAO.

The PYUSD vault operates within the same liquidity engine that supports Spark’s broader savings products.

PayPal and Spark previously integrated PYUSD into SparkLend in September, enabling users to supply and borrow the stablecoin.

At that time, the firms said they were targeting $1 billion in deposits after seeing strong early demand.

Current on-chain data shows roughly $150 million supplied to SparkLend, with around $67 million borrowed.

The new vault forms part of Spark’s Savings V2 line, which deploys funds through the Spark Liquidity Layer.

Under the structure, 90% of PYUSD deposits are allocated to yield strategies, while 10% remains available for fast withdrawals.

Depositors receive an accumulative token known as spPYUSD, which tracks interest earned by the vault.

Spark data shows vault assets are spread across stablecoins, on-chain crypto lending, corporate debt, OTC lending and U.S. Treasurys.

On-chain lending strategies are backed by overcollateralised positions using assets such as BTC and ETH.

Spark launched in 2024 as a DeFi protocol based on a fork of Aave v3.

The protocol acts as the largest subDAO of Sky Protocol, formerly known as MakerDAO.

PYUSD’s expansion strengthens PayPal’s position in decentralised finance following the stablecoin’s launch in 2023.

Paxos, PYUSD’s issuer, recently received a U.S. federal banking charter, adding regulatory weight to the stablecoin.

Analysts say the vault gives PYUSD holders a clearer on-chain yield option in markets dominated by crypto-native issuers.