The initial implementation of Spark Protocol initial implementation will serve as a lending platform, providing supply and borrowing capabilities for the cryptocurrencies ETH, stETH, DAI, and sDAI.
MakerDAO, a defi autonomous organization that runs on the Ethereum blockchain and produces the stablecoin DAI, has declared that the Spark Protocol, a financing option for DAI users, has been introduced.
Announcing the Spark Protocol launch ⚡️— Maker (@MakerDAO) May 8, 2023
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
According to the Twitter announcement, the Spark Protocol’s first iteration would function as a “lending marketplace,” offering customers supply and borrowing options for cryptocurrencies, including Ether, staked Ether, DAI, and staked DAI (sDAI). The platform was created especially for DAI and intended to provide users access to low-interest rates.
The Maker D3M (Direct Deposit Dai Module), a technology that permits communication between the Maker ecosystem and outside loan pools, is also connected to the Spark Protocol. With an initial yearly cost of just 1.11%, the connection between Spark Protocol and Maker’s D3M aims to allow users to borrow DAI at more affordable rates.
This direct wholesale credit line in DAI injects and automatically balances new DAI liquidity into Spark Lend and allows its customers to obtain the best rates in the market, according to the statement on the connection between Spark Protocol and Maker’s D3M.
Ultimately, the Spark Protocol lending solution promises to improve MakerDAO’s DAI lending capabilities, raise liquidity, give additional liquidity alternatives, provide customers with better rates, and offer a yield-bearing form of DAI.
Recently, MakerDAO put out a new “constitution” that was intended to set up and formalize its governance procedures and provide protection against any potential threats from bad actors who would try to take over the protocol.
MakerDAO’s new constitution uses “alignment engineering” to firmly establish the fundamental commitments of the Maker community, protecting user money from any failures or losses caused by human and institutional actions and ensuring the security and stability of the Maker Protocol.