MakerDAO Introduces Spark Protocol: A New DeFi Lending Solution

The crypto community is being gifted one new protocol after another! Latest offering in the crypto market is another DeFi lending solution; Spark Protocol; from the developers of MakerDAO – the decentralized autonomous organization, commonly referred to as DAO; which operates on the Ethereum blockchain. They are the network that issues the DAI stablecoin.

Announcing the Spark Protocol launch ⚡️

Starting May 9, 2023, Spark Protocol will be available to all DeFi users.

An end-user, DAI-centered DeFi product deployed on Ethereum with supply and borrow features for ETH, stETH, DAI, and sDAI. pic.twitter.com/oLa8oeBmL1

— Maker (@MakerDAO) May 8, 2023

Additional Read: What are DeFi Loans?

As per the Twitter announcement from MakerDAO, the first version of the Spark Protocol will be acting as a “lending marketplace” which will help in providing users with the supply and borrowing features for few crypto tokens. The available tokens will be as follows;

• Ether
• Staked Ether (stETH)
• DAI
• Staked DAI (sDAI).

The Spark Protocol platform has been specifically designed for DAI. The aim of this protocol is to provide its users with access to competitive interest rates. Apart from being designed for DAI users, the Spark Protocol is also linked to Maker’s D3M, i.e. Direct Deposit DAI Module. It is a system which enables interaction between third-party lending pools with the Maker ecosystem. This link between Spark Protocol and Maker’s D3M has been made to enable users to borrow DAI at a more competitive rate.

Did You Know?This has an initial annual rate of just 1.11%.

According to the announcements, “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.”

The new offering of Spark Protocol is aimed at catering towards the followings:

• Enhancing the MakerDAO’s DAI lending capabilities
• Increasing liquidity
• Offering users with improved rates
• Offering a yield-bearing version of DAI
• Providing more liquidity options

Apart from the new Spark Protocol, earlier this year, during March 2023, MakerDAO has also proposed a new ‘constitution‘ in order to formalize the governance processes along with processes that will help in preventing hostile actors from taking over the protocol.

The Maker Constitution has been approved by Maker Governance.

The Endgame Era is upon us.https://t.co/OKf9Kgo4dp pic.twitter.com/XqzsP44faQ

— Maker (@MakerDAO) March 27, 2023

The new constitution from MakerDAO, makes use of “alignment engineering” in order to ensure the security and stability of the Maker Protocol along with protecting user funds from possible failures or losses that may occur as a result of human and institutional decisions. The “alignment engineering” used, help in solidifying the core commitments set for the Maker community.

Read more: Top DAO Crypto Projects in 2023

Source: Cointelegraph