Decentralized finance (DeFi) lending protocol Spark has reallocated a significant portion of its treasury reserves from US government bonds into crypto-native yield strategies, marking a pivotal shift in onchain yield generation amid decreasing Treasury returns. On Thursday, Spark announced it deployed $100 million of its stablecoin reserves into Superstate’s Crypto Carry Fund (USCC), a regulated basis-trading fund that capitalizes on price differences between spot and futures markets of major digital assets. This fund offers DeFi protocols the opportunity to earn market-neutral yield from derivatives markets traditionally utilized by hedge funds. According to Superstate, USCC manages approximately $528 million in assets and currently delivers a 30-day yield of 9.26%. Superstate CEO Robert Leshner highlighted that this strategy allows Spark to access yield streams uncorrelated with Federal Reserve rate policies, offering crucial diversification as the Fed grapples with balancing inflation and economic growth. Despite challenges anchoring the long end of the yield curve amid rising US fiscal pressures, the 10-year Treasury yield recently dipped below 4%. Spark pointed out that the Fed’s impending rate cuts may pressure stablecoin issuers and DeFi protocols heavily reliant on short-duration Treasurys, necessitating exploration of alternative, uncorrelated returns. Notably, Tether and USDC issuer Circle collectively hold over $132 billion in US government debt—positions that could be vulnerable as market dynamics evolve. Onchain yield strategies continue to mature beyond simple lending and staking, with sophisticated approaches like market-neutral trading and restaking gaining traction. Industry research emphasizes that while Treasury yields traditionally anchor most onchain yield strategies, declining rates are driving protocols toward crypto-native income sources such as basis trading and validator rewards, which remain uncorrelated with conventional interest rate policies.