Decentralized stablecoin protocol MakerDAO has announced the official launch of Spark Protocol, a DeFi lending platform centered around DAI, effective May 9. Spark is a fork of Aave V3, allowing users to borrow DAI against collateral such as ETH, stETH, DAI, and sDAI (staked DAI) at a fixed interest rate of 1.11%.
"Spark Protocol's first version, Spark Lend, is a lending marketplace specifically designed for supplying and borrowing crypto with a focus on DAI. Its users will be able to interact with Spark's front-end directly, connecting Maker's liquidity with a complete DeFi solution."
— MakerDAO (May 8, 2023)
What Is Spark Protocol?
Spark Protocol’s debut product, Spark Lend, is a user-friendly lending marketplace that integrates MakerDAO’s:
- Direct Deposit Module (D3M): Provides liquidity for tailored interest rates.
- Peg Stability Module (PSM): Enables 1:1 instant swaps between DAI/sDAI and USDC.
Key Features:
- Fixed Borrowing Rate: Currently 1.11% (benchmarked against DAI Savings Rate, adjustable via governance).
- Uniform Rates: No supply-demand fluctuations—rates remain constant regardless of loan size.
- Liquidity Backing: D3M ensures deep liquidity, while PSM anchors stability via USDC conversions.
👉 Explore Spark Lend’s fixed-rate advantages for decentralized borrowing.
Phoenix Labs: Spark’s Core Innovator
Phoenix Labs, the first ecosystem participant incubated under Maker’s Endgame initiative, drives Spark’s development. Their focus includes:
- Vertical integration of DeFi products into MakerDAO.
- Value-sharing with developers via open collaboration.
2023 Roadmap Highlights:
- Spark Fixed Rates: Predictable yield products.
- Cross-Chain Support: Expanding to multi-blockchain ecosystems.
- EtherDAI (ETHD): A new asset backed by staked ETH (e.g., Lido’s stETH).
FAQs
1. How does Spark Lend differ from Aave?
Spark offers fixed-rate borrowing (currently 1.11%) and leverages MakerDAO’s liquidity modules (D3M/PSM), while Aave uses dynamic rates based on market demand.
2. Can I convert DAI to USDC on Spark?
Yes! The PSM module allows 1:1 instant swaps between DAI/sDAI and USDC.
3. What collateral is accepted for DAI loans?
ETH, stETH, DAI, and sDAI are currently supported.
👉 Discover how Spark’s PSM enhances stablecoin flexibility.
Risk Disclaimer
Crypto investments are volatile. Conduct thorough research and assess risks before participating.
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