• MakerDAO has announced the launch of its Spark Protocol, a lending and borrowing platform specifically designed for the DAI stablecoin.
• The protocol is linked to Maker’s D3M (Direct Deposit DAI Module), which enables users to borrow the DAI stablecoin at competitive rates.
• The Peg Stability Module connects liquidity infrastructure and enables instant swapping of DAI and sDAI for USDC.
Decentralized Finance Pioneer MakerDAO Launches Spark Protocol
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.
Spark Protocol Features
The new protocol is specifically designed for the DAI stablecoin and gives users and holders access to competitive interest rates. Its first product, Spark Lend, is linked to Maker’s D3M (Direct Deposit DAI Module). This direct wholesale credit line in DAI injects and automatically balances fresh DAI liquidity into Spark Lend and enables its users to access the best rates in the market.
Stability As A Priority
The Spark Protocol also introduces a tokenized version of the DAI stablecoin, which is deposited in the DAI Savings Rate (DSR) – known as sDAI. Although current yields may be low with deposits getting only 1.1%, Maker has focused on providing stability, liquidity, and significantly lower risk over offering risky high yields that are often unsustainable.
Peg Stability Module
To ensure stability in its offerings, Spark Protocol utilizes a Peg Stability Module that helps connect liquidity infrastructure between different tokens such as USDC/DAI/SUSD/USDT etc., thereby enabling instant swapping between them.
Overall, Maker hopes that through this launch it will be able to significantly improve its DeFi capabilities by increasing overall liquidity within their ecosystem while allowing users access improved rates as well as yield-bearing versions of tokens like Dai or Usdc through their products such as Direct Deposit Dai Module or Peg Stability Module respectively.