- MakerDAO has launched a DeFi lending platform that supports ETH and DAI coins and mostly focuses on DAI users
- Dubbed Spark Protocol, it supports both lending and borrowing at significantly low interest rates
- The platform comes days after NFT exchange Blur unveiled a similar service with a focus on NFTs
MakerDAO has launched a DeFi lending platform that supports lending and borrowing ETH and the DAI stablecoin at significantly low interest rates. Dubbed Spark Protocol, the platform is linked to Maker’s direct deposit Dai module (D3M) that manages engagement between external lending solutions and the Maker ecosystem. The unveiling of Spark Protocol comes a few days after NFT exchange Blur unveiled a similar offering with a focus on NFTs.
Interest Rate Won’t Increase with Utilization
In a Twitter thread, MakerDAO disclosed that the first iteration of the platform, known as Spark Lend, will deal with lending and borrowing ETH, DAI and staked versions of the two coins. Maker added that the platform was built with DAI users in mind to offer them loans at very low interest rates.
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
According to MakerDAO, the use of D3M allows the lending platform’s users to access DAI loans at a very low interest rate of slightly above one percent per year, with MakerDAO adding that the “rates do not increase with utilization, no matter what [the] size is.” MakerDAO noted that the lending platform provides DeFi users with a scalable and decentralized lending solution powered by the Ethereum blockchain.
In short, this means that through Spark Lend, users can now borrow DAI at an initial 1.11% annual rate due to the direct injection of liquidity from Maker.
Rates do not increase with utilization, no matter what your size is!
— Maker (@MakerDAO) May 8, 2023
USDC Remains the Collateral
The launch of the Spark Protocol comes roughly less than two months after the MakerDAO community voted to retain USDC as DAI’s main collateral despite MakerDAO’s founder Rune Christensen suggesting that the project should “seriously consider” ditching USDC and diversify DAI’s collateral.
With MakerDAO being a reputable force in the crypto space, Spark Protocol is likely to gain sizable traction in the DeFi world.
