MakerDAO Launches Spark Lending Protocol

Users Can Lend and Borrow ETH, stETH, DAI and sDAI

MakerDAO Launches Spark Lending Protocol

MakerDAO, the issuer of DAI, the leading decentralized stablecoin, has launched Spark Protocol, a new lending platform that aims to bolster DAI's capabilities.

Spark Lend is the protocol's debut offering and allows users to borrow or supply Ether, stETH, DAI, and savings DAI at competitive rates. Savings DAI (sDAI) is a new yield-bearing token that represents DAI deposited in Maker's DAI Saving Rate (DSR) module.

Maker's governance token MKR is down 4.5% in the past 30 days, while ETH is down 0.5% in the same period.

MKR Price
ETH Price

MKR Price + ETH Price, Source: The Defiant Terminal

Spark Protocol is the first product of Maker's Endgame plan, which involves restructuring the DAO into multiple subDAOs, each with its own governing token. With the launch of Spark, a new yield-bearing DAI token called savings DAI (sDAI) has been introduced, which represents DAI that is deposited in Maker's DAI Saving Rate (DSR).

Phoenix Labs, the development team behind Spark protocol, has built Spark Protocol as a soft fork of Aave V3. They plan on sending 10% of the profit generated from the protocol to AaveDAO for the first two years.

Spark uses Chainlink price feeds for all pairs except sDAI, making it the first time that the Maker ecosystem has used Chainlink as its oracle provider.

Spark is integrated with Maker's Peg Stability Module (PSM), which allows users to convert DAI or sDAI into USDC and vice versa. This provides greater flexibility as users can now enter or exit the DSR via Circle's USDC stablecoin.

MakerDAO has passed several governance proposals recently, including one that limits the need for Real World Assets as collateral and another that shut down the credit vault accessible to Societe Generale subsidiary SG-Forge.

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