The first version of the Spark Protocol is set to operate as a lending platform, providing the capability to supply and borrow cryptocurrencies including ETH, stETH, DAI, and sDAI.
MakerDAO, a decentralized autonomous organization that operates on the Ethereum blockchain and is responsible for issuing the stablecoin DAI, recently unveiled the Spark Protocol, a lending platform designed to cater to DAI users.
Additionally, the Spark Protocol is integrated with Maker's D3M (Direct Deposit Dai Module), which facilitates interactions between the Maker ecosystem and third-party lending pools. The integration aims to enable users to borrow DAI at more competitive rates, starting with an initial annual rate of 1.11%.
The announcement emphasized that the connection between Spark Protocol and Maker's D3M will establish a direct wholesale credit line in DAI, injecting and automatically balancing fresh DAI liquidity into Spark Lend and enabling its users to access the best rates in the market.
Ultimately, the Spark Protocol's lending solution seeks to:
- improve MakerDAO's DAI lending capabilities;
- increase liquidity;
- offer users better rates;
- provide a yield-bearing version of DAI;
- furnish more liquidity options.
MakerDAO has put forth a new "constitution" that aims to establish and formalize its governance procedures, while also safeguarding the protocol against potential attacks from bad actors seeking to take control. The main objective of this constitution is to enhance the security and stability of the Maker Protocol and protect user funds from possible failures or losses caused by human and institutional decisions. This is accomplished by employing "alignment engineering," which reinforces the fundamental commitments of the Maker community.
