MakerDao Launches Spark Protocol: A New DeFi Solution on Ethereum

MakerDao has recently made a significant announcement about the launch of its latest DeFi product, Spark Protocol. The news was shared through the official Twitter account of MakerDao, stating that the Spark Protocol will be available for all DeFi users starting from May 9, 2023.

According to the tweet, Spark Protocol is an end-user, DAI-centered DeFi product that will be deployed on Ethereum. The product will have supply and borrow features for ETH, stETH, DAI, and sDAI. The first version of the Spark Protocol, Spark Lend, will be a lending marketplace designed specifically for supplying and borrowing crypto with a focus on DAI.

The users of Spark Protocol will be able to interact with Spark’s front-end directly, which will connect Maker’s liquidity with a complete DeFi solution. MakerDAO has stated that Spark Protocol is one of the many innovations that the Endgame Era will bring to the MakerDAO ecosystem, enabling a groundbreaking solution that could only have arisen from the connection between a DeFi product and the Maker Protocol.

The Spark Protocol is connected with Maker’s D3M, which will provide a direct wholesale credit line in DAI, injecting and automatically balancing fresh DAI liquidity into Spark Lend. This will enable users to access the best rates in the market for borrowing DAI. Rates do not increase with utilization, regardless of the size of the borrower.

Spark Protocol will also introduce a tokenized version of DAI deposited in the DSR, called Savings DAI (sDAI). Through Spark Lend, users will be able to employ a yield-bearing version of DAI that is automatically connected to the Dai Savings Rate module. The Dai Savings Rate’s percentage yield is currently at 1.00% and may change via Maker Governance’s on-chain voting, which would directly affect Spark Lend’s DAI rates.

In addition to this, the Peg Stability Module (PSM) connects massive liquidity infrastructure for instant swapping of DAI and sDAI for USDC, and vice versa, at a 1:1 rate. Users will now be able to enter DSR from USDC, further increasing the product’s versatility.

MakerDao’s announcement also highlights the importance of empowering DeFi users with true decentralized, scalable, and top-tier Ethereum-based technology. The company’s focus on vertically integrating existing products into Maker and sharing the resulting value creation with developers is evident in this latest product, with Phoenix Labs Development Company playing a significant role in the innovation of the Spark Protocol product.

The company has been assigned the “Ecosystem Actor” role under the new Maker Endgame’s organizational structure. For further understanding, MakerDao has encouraged its users to read the following thread. With the launch of Spark Protocol, MakerDao has once again proved its commitment to innovation and providing cutting-edge solutions to the DeFi community.

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