Spark are one of the best lending counterparties. Yesterday a borrower spiked borrow rates on the Spark sUSDe/DAI pool to 25%. Spark responded in ~17 hours to add liquidity and bring borrow rates back to ~7%. In 17 hours a max levered borrower would have only lost ~.15%.

The losses were caused because PT sUSDe yields are ~15%, meaning a 10% loss per loop at borrow rates of 25%. That Spark pool is one of the very limited quality sources of liquidity for Ethena loopers outside of Aave, but it’s under half a mill in liquidity.

Volatile utilization is probably expected given volatility of the funding rate. Aave dominance of Ethena loops and hitting supply caps will likely push loopers who couldn’t get access into Reservoir and Resolv.

Some good non Ethena options: Steakhouse is cooking on srUSD loops and MEV capital on RLP loops; both with way deeper liquidity on Morpho than Ethena.