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sponge (n.)

Old English sponge, spunge, from Latin spongia "a sponge," also "sea animal from which a sponge comes," from Greek spongia, related to spongos "sponge," of unknown origin. "Probably a loanword from a non-IE language, borrowed independently into Greek, Latin and Armenian in a form *sphong-" [de Vaan]. The Latin word is the source of Old Saxon spunsia, Middle Dutch spongie, Old French esponge, Spanish esponja, Italian spugna.

In English in reference to the marine animal from 1530s. To throw in the sponge "quit, submit" (1860) is from prizefighting, in reference to the sponges used to cleanse the faces of combatants between rounds (compare later throw in the towel). Sponge-cake is attested from 1808.

sponge (v.)

late 14c., "to soak up with a sponge," also (transitive) "to cleanse or wipe with a sponge," from sponge (n.). The slang sense of "to live in a parasitic manner, live at the expense of others" is attested from 1670s; sponger (n.) in this sense is from 1670s. Originally it was the victim who was the sponge (c. 1600), because he or she was being "squeezed." Intransitive sense "dive for sponges" is from 1881. Related: Sponged; sponging.

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Definitions of sponge from WordNet
1
sponge (v.)
wipe with a sponge, so as to clean or moisten;
sponge (v.)
ask for and get free; be a parasite;
Synonyms: mooch / bum / cadge / grub
sponge (v.)
erase with a sponge; as of words on a blackboard;
sponge (v.)
soak up with a sponge;
sponge (v.)
gather sponges, in the ocean;
2
sponge (n.)
a porous mass of interlacing fibers that forms the internal skeleton of various marine animals and usable to absorb water or any porous rubber or cellulose product similarly used;
sponge (n.)
someone able to acquire new knowledge and skills rapidly and easily;
she soaks up foreign languages like a sponge
Synonyms: quick study
sponge (n.)
a follower who hangs around a host (without benefit to the host) in hope of gain or advantage;
Synonyms: leech / parasite / sponger
sponge (n.)
primitive multicellular marine animal whose porous body is supported by a fibrous skeletal framework; usually occurs in sessile colonies;
Synonyms: poriferan / parazoan
From wordnet.princeton.edu