SparkLend reports $725M WETH borrowed, maintains low rates below 2%

SparkLend, the lending arm of Sky Protocol, shows about $725 million of wrapped Ether borrowed at a variable rate of 1.81%, with utilization near 70.7%. The protocol pegs WETH borrowing to a two-day average of stETH staking yields minus 10 bps, keeping borrowing costs tightly aligned with staking returns and sustaining steady demand for cheap ETH leverage. Recent snapshots show borrowing in the $700M–$760M range (May 21: $761M at 1.85%, utilization 72.1%), and roughly $1.95B in wstETH supplied as collateral, highlighting concentration risk. For ETH holders, sub-2% borrowing rates make leverage inexpensive and may support on-chain activity, but the model’s dependence on staking yields and heavy wstETH concentration could compress lender returns or exacerbate stress in a sharp ETH price decline. Overall, the data point to robust borrowing demand and efficient on-chain rate design, but with measurable risk from yield shifts and collateral concentration.