Stablecoins Could 10X by 2030 - But These Crypto Projects Could Win Even Bigger

Sam MacPherson (0:00)

We know that like every institution, every bank has some degree of a stable coin plan at this point. They would be negligent if they didn't have some sort of plan about how to get involved.

John Gill (0:09)

Stable coins moved tens of trillions of dollars on chain last year. But according to a new report from Cetrine Research, only a tiny sliver of that was people actually paying for things. So what are stable coins if they are not payment rails? And what do investors need to know about all of this? Hello and welcome to Milk Road Crypto, the show that always brings the spark, even when the markets don't. I'm your host, John Gill. And today is Tuesday, October 20th. Today we are joined by Sam MacPherson. Sam is the co-founder and CEO of Spark, the biggest capital allocator in the Sky ecosystem, formerly MakerDAO. Sam is one of the best people to talk to about all things crypto. So he's gonna share a ton of alpha with us today. If that sounds good to you, make sure you like and subscribe, share this episode with somebody who's gonna enjoy it. We don't have any sponsors today, so I'm just gonna say thank you all so much for watching and supporting the show. It means a lot to us. If you like what we do here, share the episode and make sure somebody you know knows about us. But without further ado, welcome to Milk Road Crypto. Sam MacPherson. Welcome, sir. How are you?

Sam MacPherson (1:01)

Yeah, I'm doing great. Thanks for having me.

John Gill (1:04)

Sam, I'm really excited to talk to you today. You are one of the oldest and most vetted builders in all of crypto.

So I'm excited to get some wisdom from you today. I thought a good place to start the show would be with just telling us a little bit about Spark because for people who are new to crypto, they may not be familiar. What is Spark and where does it sit in the Sky ecosystem?

Sam MacPherson (1:21)

So Sky, which is a re-brand from MakerDAO, has existed since basically the beginning of DeFi, originally launched in 2019 even. Part of this is there was a re-brand to Sky, but part of the upgrade that occurred starting in about 2022 was a restructuring of the governance such that Sky sits, I think this is a useful analogy, Sky sits as like more like a central bank that issues wholesale liquidity to sub-dows of which Spark is one of those. Spark sits as more of like similar to a commercial bank and that we take in deposits and then we are lending our book mostly against over collateralized crypto. Yeah, this restructuring has a number of benefits both from the governance side, but as well as sort of scaling the system as a whole. So a little bit about Spark. Spark is a capital allocator across DeFi, CFi, TradFi. And so we have a number of products. We have Sparkland, which is our pooled lending market, which lends against crypto, Bitcoin, ETH, LSTs, these types of things. It is the second largest pooled lending market at $5 billion in TVL as of today. And yeah, it's been growing quite a bit over the past few months. Spark also has another product called Spark Savings, which allows you to earn on your USDC, USDT, and increasingly we're supporting newer stable coins that are coming to market. This is basically a treasury management product that's designed to be highly liquid with the underlying so that people can get institutions in particular can get in and out of the Spark Savings at large size, hundreds of millions even.

We also have an institutional OTC crypto lending product. This is loans through qualified custodians such as Anchorage against Bitcoin. And we also more recently launched a product called the Stablecoin FX layer, where we facilitate clearing between stable coins, especially the smaller ones who need liquidity with mainly like USDC, USDT.

So we'll do market making there on chain through Uniswap and provide large amounts of liquidity so that people who are using these newer stable coins such as PayPal, Pi, USD, RL, USD, USDG, etc. can swap with the other more larger stable coins.

John Gill (3:51)

You guys are one of the oldest projects in DeFi, as you said, but you're also still innovating.

You guys have called yourselves the largest capital allocators on chain with over $3 billion deployed. And as you referenced, this stablecoin FX layer, which is a relatively new product, has done over $15 billion in volume since June. Talk to me about how the bear market versus bull market dynamics work for your business. Do these product lines tend to perform better in a bull or a bear? Does it not matter? And what are those dynamics like that drives this huge growth in Spark?