SparkUSDC Vault on Base
Supply Caps
Caps
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Cap by Ethena Liquid Undelegated: 10% of Ethena’s liquid undelegated backing ($6.22B) = $622M
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Cap by Morpho Stable Liquidity: 15% of total USDC/USDT/USDTb liquidity on Morpho (≈$2.50B) = $375M → Effective system-wide Morpho cap = $375M.
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Cap by Curator (Spark): Spark AUM ≈ $922M → 15% = $138M maximum allocation to Spark-managed vaults on Morpho. Spark’s total AUM (including Morpho) is $5.5bn (25/08/25) so at a 5% allocation this equates to $275M. Averaging these two AUM thresholds gives a supply cap to Spark vaults at around $200M.
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Per-Vault Entry Size: Normally capped at 1% of Ethena’s undelegated backing (~$62M). Given Spark’s track record (first vault Mar 2024; this USDC vault live since Dec 2024 and currently the largest on Morpho), we advise up to 2% of undelegated backing (~$124M) for initial entry to this vault, before the full position is scaled into.
Pilot Allocation: Begin with a $1M pilot to validate operational processes and APY. Initial scaling should remain within current available liquidity (~$82M) to avoid withdrawal constraints.
Scaling Path: Gradually increase exposure toward the 2% undelegated cap (~$124M), subject to ≤2% APY impact.
Dynamic Monitoring
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Liquidity & APY: Track daily.
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Weekly Curator Review: Focus on Spark’s transparency in market selection (currently only cbBTC/USDC).
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Monthly Forecast Calibration: Use historical APRs and liquidity data to project expected returns and align with Ethena’s liquidity risk appetite.
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Biweekly Risk Updates: Reassess curator risk score, governance responsiveness, and bad debt incidents.
Conclusion
The Spark USDC vault is large, liquid, and straightforward (single cbBTC/USDC market). Curator risk is low, but entry should follow a pilot-and-scale approach. Initial allocation (after piloting) is 2% of Ethena undelegated ($124M), subject to the broader $375M Morpho cap and $200M Spark curator cap.