Spark, a DeFi lending platform & onchain asset allocator, reportedly allotted $100 million of its stablecoin reserves into Superstate’s USCC fund, a regulated crypto basis trading product that generates yield from price differentials between spot and futures markets. This update is said to mark one of the large-scale moves by a DeFi protocol to diversify away from government securities as Treasury yields reach 6-month lows.
Robert Leshner, CEO of Superstate said that the investment enables Spark to maintain exposure to yield opportunities that are said to be uncorrelated with Federal Reserve rate policy while operating within “a compliant institutional framework.” Leshner added that a protocols adapt to the new rate environment, they’re helping them “do it within a regulated, institutional framework.”
Sam MacPherson, CEO and Co-Founder of Phoenix Labs, the main dev behind Spark, added that Superstate’s USCC fund enables Spark to diversify its reserves while maintaining the “same level of safety and compliance Spark always prioritizes.” They added that as onchain ecosystems continue to evolve, combining regulated yield with “verifiable infrastructure is essential to delivering stability and long-term value for Spark’s users.”
With the 10-year U.S. Treasury now dropping below 4% to 3.976% this past week, the Fed’s rate-cut cycle is said to be putting pressure on stablecoin issuers and DeFi protocols that rely on “short-duration” Treasuries to fund operations and incentives – “forcing them to cut incentives or find alternative sources of yield.”
Superstate’s USCC fund makes use of basis trading strategies that aim to exploit the spread between spot and futures prices across digital assets.
The fund reportedly maintains market-neutral exposure, “spanning Bitcoin, Ethereum, Solana, and XRP (including staked assets), alongside U.S. Treasury holdings, currently producing a 30-day yield of 8.35%.”
The allocation enables Spark to maintain exposure to yield opportunities that are said to be “uncorrelated to Federal Reserve interest rate policies while operating within a compliant institutional framework.”
These treasury headwinds come as crypto derivatives reach new milestones: CME logged “$900+B in Q3 futures and options, led by ETH.”
Busy derivatives markets tend to “support the small pricing gaps that USCC’s carry strategy harvests.”
Superstate’s fund is reportedly custodied by Anchorage Digital, audited by Ernst & Young, and calculates its net asset value via NAV Fund Services.
Holdings are said to be disclosed and include Bitcoin, Ethereum, Solana, and XRP in “custody and collateral positions, alongside futures contracts on CME and forward contracts with institutional counterparties like FalconX.”
