• MakerDAO has announced the launch of their lending and borrowing protocol, Spark.
• The new protocol is specifically designed for the DAI stablecoin and gives users and holders access to competitive interest rates.
• The Spark Protocol promises to significantly improve MakerDAO’s DAI lending capability, increase overall liquidity, provide more liquidity options, and allow users to access improved rates and a yield-bearing version of DAI.
Decentralized Finance (DeFi) pioneer MakerDAO has announced the launch of its lending and borrowing protocol, Spark. The new protocol’s initial iteration will function as a lending platform and allow users to lend and borrow ETH, DAI, stETH, and sDAI.
Features of Spark Protocol
The new protocol is specifically designed for the DAI stablecoin and gives users and holders access to competitive interest rates. It is linked to Maker’s D3M (Direct Deposit DAI Module), which enables secure interaction between the Maker ecosystem and third-party lending pools. As a result of this link between Spark Protocol and the Direct Deposit DAI Module, users can borrow the DAI stablecoin at competitive rates at an initial annual rate of 1.11%. In addition, it also introduces a tokenized version of the DAI stablecoin called sDAI that is deposited in the DAI Savings Rate (DSR). However, yields are quite low at the moment with only 1.1%. It also utilizes a Peg Stability Module for instant swapping of DAI and sDAI for USDC.
Benefits Of The Protocol
The introduction of Spark Protocol provides benefits such as improved MakerDAO’s DAI lending capability; increased overall liquidity; more liquidity options; improved rates; yield-bearing version of DAi; secure interactions between maker ecosystems; connected liquidity infrastructure; instant swapping capabilities etc.
Maker’s focus on stability means that decentralized finance users have become wary of protocols offering risky high yields that are often unsustainable in nature. As a result they focus on providing stability, liquidity while bringing lower risk aspects into play with their products like spark Protocol & its product like spark Lend which give better yields while being safer than other DeFi projects out there in market today
MakerDao plans on launching more products under its spark protocol umbrella with time so that it can gain significant user base & make DeFi systems even safer by reducing risks associated with them & providing better financial services