Spark announced that it ended the first quarter of 2026 in profit, with gross protocol returns of $31.5 million and treasury of $46.1 million.
The protocol shared the numbers of his Financial report first quarter 2026and so far the second quarter is going well for Spark, after it emerged as the unlikely beneficiary of the worst crisis to hit its biggest competitor in years.
Aave, the dominant force in decentralized lending, suffered a major blow on April 18 when attackers exploited a vulnerability in Kelp DAO’s LayerZero V2 cross-chain bridge. The attackers minted approximately 116,500 unbacked rsETH tokens worth approximately $293 million and used them as collateral to extract real wrapped Ether from Aave’s pools.
The attack led to losses estimated at between $124 million and $230 million in bad debts, and caused more than $15 billion in deposits to flee from the protocol in the days that followed.
So far, the DeFi ecosystem has done that rallied to come to Aave’s aid with a multi-party recovery initiative called DeFi United. The initiative has since attracted contributions and attention from across the ecosystem $304 million towards restoring rSETH support.
How did Spark turn a rival’s crisis into a moment of validation?
Spark made a board decision on January 29 to halt all new rsETH supply, citing low and highly concentrated usage. This was around the same time period when Aave launched its rSETH E-Mode with a loan-to-value ratio of 93%.
Spark was criticized for that decision at the time, with users of $ETH circular leverage strategies that accuse the protocol of being overly conservative and foregoing growth.
However, when Aave suffered an exploit three months later, Spark recorded zero direct losses. SparkLend TVL rose from $1.88 billion to over $3.4 billion as capital moved from Aave to its platform from users looking for a safer haven.
Spark’s SPK token is up 33% since April 18 and is trading around $0.036.
The protocol announced on April 23 on X that this is the case $USDT Savings Vault surpassed $1 billion in total value locked (TVL) in just about seven months after launch.
Can Aave pull off the kind of comeback that Bybit pulled off last year?
The DeFi United initiative has drawn comparisons to Bybit’s recovery from a $1.4 billion theft by North Korea’s Lazarus Group in February 2025.
Bite his reserves restored within 72 hours via partner support and processed over 350,000 withdrawal requests in the first 12 hours.
However, Aave’s situation is a bit different and more complex. DeFi United is not a bilateral backstop arrangement between a platform and its partners. It is a decentralized, multi-DAO coalition that seeks to coordinate collateral recovery across multiple networks, pending board votes and third-party technical actions by the likes of KelpDAO and the Arbitrum Security Council.
Major pledges include 25,000 $ETH of the Aave DAO, 30,000 $ETH van Mantel, and 30,765 $ETH released by the Arbitrum DAO.
Stani Kulechov, the founder of Aave, has personally pledged 5,000 $ETH. Solana Foundation President Lily Liu said her organization provides loans $USDT for the first time against Aave, citing cross-network DeFi stability as a motivation.
Circle also announced that it was purchasing AAVE tokens, viewing the investment as a support for the ecosystem and community built around it. Consensys and co-founder of Ethereum Joseph Lubin joined DeFi United with a whopping 30,000 $ETH in the field of financial support.