Spark to Deploy as Much as $3.6 Billion Into Tokenized Treasuries

The total value of the tokenized treasuries industry could double in the next few days, according to Phoenix Labs CEO Sam MacPherson.

Spark, a decentralized finance (DeFi) lending protocol developed by Phoenix Labs, could inject approximately $3.6 billion into tokenized treasuries, raising the industry’s market cap from $4.6 billion to over $8 billion, according to a March 18 X post by MacPherson.

Spark just announced the winners of its eight-month-long Tokenization Grand Prix, a competition designed to onboard $1 billion in stablecoins into winning projects via its Spark Liquidity Layer (SLL), an automatic liquidity issuer.

However, MacPherson believes the actual amount of liquidity to be distributed will be closer to $3.6 billion.

MacPherson explained that Sky must keep 25% of its assets in USDC as a cash reserve. With a total balance sheet of $8.4 billion, that means they need to hold $2.1 billion in USDC. Any funds beyond this requirement—after accounting for their existing $4.4 billion in USDC and $1.3 billion in cash reserves—can be invested in tokenized Treasury bills. That leaves $3.6 billion available for allocation to tokenized T-bills.

Of the 39 applications received, Spark chose three winners based on pricing, liquidity, and strategic considerations. BUIDL by Blackrock, USTB by Superstate, and JTRSY by Centrifuge-Anemoy Janus Henderson emerged as the top three.

Upon approval from Sky governance, winners of the competition will receive an initial allocation of $500 million, $300 million, and $200 million, respectively. Voting on the final allocation is scheduled for April 3.