PayPal launches a PYUSD Savings Vault on Spark as deposits target $1 billion

TL;DR

• PayPal launches PYUSD Savings Vault on Spark for 4.25% APY.
• Targets $1B in deposits via onchain yield from DeFi strategies.
• Yield sourced from Spark’s protocol revenue and lending activities.

PayPal is launching the PYUSD Savings Vault on Spark, giving holders of PYUSD a new way to earn yield on stablecoin balances through an onchain product. The rollout follows PayPal’s earlier integration of PYUSD into SparkLend, where both firms stated an objective to grow deposits toward $1 billion.

Spark’s site lists 4.25% APY for the PYUSD vault, a rate that matches the range often advertised for other major stablecoin vaults tied to USDC and USDT, along with USDS, a token issued by Sky, the organization previously known as MakerDAO.

Introducing the PYUSD Savings Vault: Earn with PYUSD

Since Savings V2 launched in October, TVL has quickly reached $395M. Building on this momentum and reinforcing Spark’s role as the stablecoin growth engine for DeFi. ⚡️ pic.twitter.com/xz44IlqiQm

— Spark (@sparkdotfi) December 15, 2025

PayPal presents a simple user action: deposit PYUSD and receive yield. Spark supplies the internal plumbing. Documentation says vault yield stays “anchored” to the Sky Savings Rate, a benchmark funded by Sky Protocol revenue. Sky generates revenue from stability fees on overcollateralized loans, investments in real-world assets, and liquidity provision through Spark, described as Sky’s first and largest subDAO.

How the PYUSD Savings Vault works and where the yield comes from

Spark operates as a DeFi lending and liquidity protocol that offers stablecoin savings vaults and a decentralized money market called SparkLend. SparkLend follows a familiar DeFi format: users deposit crypto collateral and borrow stablecoins against that collateral, with the loan kept overcollateralized.

PYUSD joined SparkLend in September, enabling users to supply and borrow the stablecoin inside the market. At that time, PayPal and Spark said they aimed to grow deposits to $1 billion after seeing roughly a fifth of that target deposited during the first 24 hours.

Spark’s current figures show meaningful balances in place. Nearly $150 million of PYUSD sits supplied and earns around 2.11%, while borrowed PYUSD stands near $67 million, based on Spark’s own metrics.

The new PYUSD Savings Vault is positioned to expand PYUSD deposits by adding a more direct savings route. The vault sits inside Spark’s Savings V2 line and uses the Spark Liquidity Layer, which deploys stablecoin deposits across Spark’s balance sheet, including lending strategies on SparkLend. Spark says total value locked in Savings V2 vaults has reached about $395 million since launching in October.

The vault’s allocation rules are explicit

Documentation states 90% of deposits flow through the Spark Liquidity Layer into yield-generating strategies, while 10% stays parked in the contract as liquidity for instant withdrawals. Interest accrues to spPYUSD, an accumulative token issued to depositors.

Spark also publishes a breakdown of the vault’s current composition. More than 57% remains held in stablecoins. Another 15.73% routes to onchain crypto lending, defined as overcollateralized lending against large-cap crypto-native assets such as BTC, ETH, and staking-related tokens. The remainder includes 10.24% in AAA corporate debt, 10.10% in OTC crypto lending, 5.32% in Treasurys, plus smaller allocations to other accepted strategies.

PayPal contributes the stablecoin brand and distribution. Spark contributes the yield engine and liquidity routing. Together, both firms frame the PYUSD Savings Vault as another step toward expanding PYUSD deposits inside DeFi, with the $1 billion target acting as the headline benchmark for growth.