Spark, the DeFi player operated by Phoenix Labs with a TVL of $9B, has cancelled the development of a consumer mobile app to redirect resources toward liquidity platforms and institutional partnerships. The decision, explained by CEO Sam MacPherson, aims to position Spark as a B2B provider that facilitates the integration of institutional capital into decentralized protocols. This move signals a shift in focus away from retail experiences and toward on‑chain liquidity mechanisms for wholesale markets.
Phoenix Labs —Spark’s parent company— justified the pause in the app project citing strong competition in the retail space and a bet on specialization. “We are not builders of consumer apps, and this space is very competitive”, Sam MacPherson noted; the phrase summarizes the decision to concentrate efforts on building “liquid infrastructure within DeFi”. The strategic pivot centers on institutional integration rather than retail onboarding.
Spark aims to consolidate its competitive advantage in wholesale markets and in on‑chain liquidity mechanisms, instead of competing for retail users. Spark reports $9.000 millones in TVL, a figure that supports its ambition to be a liquidity bank for institutional flows.
A concrete example of the new stance is the reported $1.000 millones investment in PYUSD, the stablecoin linked to PayPal, intended to feed lending markets like SparkLend and improve the depth and predictability of liquidity for institutional counterparties.
Why Spark prioritizes institutional infrastructure
The reorientation comes in a context of European regulations and market changes that favour institutional offerings. Data cited indicate a DeFi market capitalization of $98.000 millones at the beginning of 2025 and a supply of stablecoins in the EU of €450.000 millones, a 37% year‑on‑year increase, pointing to greater demand for compliant infrastructure. Projections cited anticipate that protocols aligned with regulatory frameworks could capture $22.000 millones of the DeFi market by the end of 2025, with potential institutional inflows of 40% equivalent to $13.000 millones.
For managers and institutions, Spark’s bet implies access to deeper pools and, potentially, products with greater compliance guarantees; for retail users, it means less immediate focus on direct onboarding experiences. Operational implications: concentrating resources on institutional liquidity can reduce fragmentation of stable markets and lower funding volatility in on‑chain credit products, but it also increases dependence on counterparties and transactional regulatory frameworks.
Spark’s decision reflects a shift from user‑centric growth toward building financial rails for institutions. If execution matches the announced figures, the firm could become a critical liquidity provider for stablecoins and credit markets.
