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MakerDAO Governance Proposal: Introducing lending platform Spark Lend! Forked from Aave v3

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MakerDAO Governance Proposal: Introducing lending platform Spark Lend! Forked from Aave v3

Following MakerDAO founder Rune Christensen's "Endgame" plan announced in August last year, a new proposal was introduced this Wednesday, garnering attention. Phoenix Labs, the R&D company in the MakerDAO ecosystem, proposed to establish a liquidity market called "Spark Protocol" to enhance MakerDAO's functionality by providing variable or fixed-rate borrowing of crypto assets, as well as liquidity collateralized derivatives.

Introduction to Spark Protocol

The first product of Spark Protocol is " Spark Lend", a lending market with a frontend interface that integrates MakerDAO's Direct Deposit Module, D3M, and Peg Stability Module, PSM. It allows users to lend out DAI at the DAI deposit rate. The DAI deposit rate increased from 0.01% to 1% at the end of last year.

Spark Lend's collateralization will focus on high liquidity, high market value decentralized assets, aiming to become the safest platform in the DeFi space. Initially, the following assets will be supported as collateral on Spark Lend:

  • DAI
  • DAI in sDAI deposits
  • ETH
  • Lido wstETH
  • WBTC
Spark Lend Testing Interface

Additionally, users can easily exchange between DAI, sDAI, and USDC on Spark Lend, helping users who only hold USDC to earn DAI deposit rate returns.

Spark Lend Currency Exchange Interface

Note: D3M aims to facilitate interaction between the Maker ecosystem and third-party lending pools, ensuring that the maximum variable rate for borrowing stays below the target rate determined by Maker governance; PSM is a fixed-price token swap protocol based on Dai. For example, with USDC PSM, users can mint new Dai at a 1:1 ratio using USDC.

The implementation of Spark Protocol's plan is pending a vote by the MakerDAO community. If approved, Spark Lend is expected to launch in April this year with an initial loan cap of 200 million DAI.

Furthermore, as Spark Lend's smart contract system forks from Aave v3, Spark Protocol will distribute 10% of the profits earned in the DAI market to AaveDAO over the next two years.

Future Development of Spark Lend

In addition to the mentioned features, Spark Lend currently plans to collaborate with Dec, Sense Finance, and Element Finance on fixed-rate protocol integration, expected to launch in the second half of this year.

Furthermore, as part of the endgame of MakerDAO, EtherDai will also be deployed on Spark Lend in the future.

Note: EtherDai (ETHD) is a new asset generated by pledging ETH and integrates top-tier liquidity collateralized borrowing currencies like Lido Finance's stETH.