Sky DeFi Uses Staking Rewards for SKY Buybacks SPK Surges 75%

Sky DeFi’s founder Rune has initiated a new round of SKY token buybacks using staking rewards, further solidifying the protocol’s strategy to bolster token value. According to monitoring data, Rune claimed 1.9 million USDS and 10.378 million SPK (equivalent to $1.3 million) from staking rewards within the past hour, transferring these proceeds to a designated buyback address. The SPK portion is being liquidated to repurchase SKY tokens, continuing a practice aimed at reducing circulating supply and reinforcing investor confidence [1].

The Spark platform, a key component of the Sky ecosystem, has amplified this approach by leveraging staking incentives and airdrops to generate liquidity for buybacks. Recent data shows SPK has surged over 75% following a 12.65% APY on USDS staking and the distribution of 65% of its token supply to users. Over 129 million SPK tokens have been staked since June, generating $66 million in fees and $5.6 million in annual revenue for the protocol [1].

Sky’s total-value locked (TVL) has surpassed $8.1 billion, with Spark’s savings and lending products accounting for the majority of assets. The platform’s savings product alone manages $2.45 billion in assets, supported by nearly 200,000 users. Funds from staking rewards and fees are systematically funneled into SKY buybacks, a strategy designed to enhance token scarcity and align with broader market expectations for capital efficiency [2].

This approach aligns with Sky’s rebranding and segmentation strategy, including the creation of SparkDAO to focus on yield generation and governance. Tiered staking incentives, such as Spark Points offering 3x reward amplification, have incentivized long-term participation while stabilizing demand for SPK. Analysts note that SPK’s current $119 million market capitalization appears undervalued relative to its TVL and projected $200 million in annual revenue, citing comparisons to DeFi peers like Pendle.fi and Ethena [1].

The 38% 30-day TVL increase underscores strong user engagement, though challenges remain. Sustained APY competitiveness and regulatory clarity around DeFi mechanisms, particularly proof-of-stake models, are critical to long-term success. Spark’s integration of features like the Spark Liquidity Layer and partnerships with protocols such as MarginFi, which now offers USDS staking rewards, position it to expand its market share [3].

Despite regulatory uncertainties, Spark’s governance-focused model and user-centric rewards align with evolving investor preferences for transparency. The platform’s buyback strategy, combined with its role as an “on-chain bank” for DAI lending and savings, highlights a structured approach to balancing growth with token value retention [4].

Source:

[1] 99Bitcoins, SPK Crypto Jumps +75%: Spark Skyrockets Before Second Ignition Airdrop, [https://99bitcoins.com/news/presales/spk-crypto-jumps-75-spark-skyrockets-before-second-ignition-airdrop/](https://99bitcoins.com/news/presales/spk-crypto-jumps-75-spark-skyrockets-before-second-ignition-airdrop/)

[2] Bitrue, SPK Token: Spark Governance, Staking & Tokenomics..., [https://www.bitrue.com/blog/what-is-spk-token-spark-governance-staking-tokenomics](https://www.bitrue.com/blog/what-is-spk-token-spark-governance-staking-tokenomics)

[3] X, MarginFi - X, [https://x.com/marginfi?lang=en](https://x.com/marginfi?lang=en)

[4] CLS, CLS Blue Sky Blog, [https://clsbluesky.law.columbia.edu/](https://clsbluesky.law.columbia.edu/)