MakerDAO launches lending protocol Spark, centered around DAI, with fixed borrowing rates and a 1:1 exchange with USDC.

The decentralized stablecoin protocol MakerDAO announced the official launch of Spark, a DeFi lending protocol centered around DAI, starting from May 9th. Spark is a fork version of the lending protocol Aave V3, where users can borrow DAI by depositing assets such as ETH, stETH, DAI, and sDAI. The current interest rate is fixed at 1.11%.

Spark Protocol's first version, Spark Lend, is a lending marketplace specifically designed for supplying and borrowing crypto with a focus on DAI.

Its users will be able to interact with Spark's front-end directly, connecting Maker's liquidity with a complete DeFi solution.

— Maker (@MakerDAO) May 8, 2023

Introduction to Spark Protocol

The first product of Spark Protocol is "Spark Lend," a frontend interface lending market that integrates MakerDAO's Direct Deposit Module, D3M, and Peg Stability Module, PSM, allowing users to lend DAI at a fixed interest rate of 1.11%, pegged to the DAI savings rate. This rate may change based on MakerDAO's on-chain governance votes, directly impacting Spark Lend's DAI rate.

With liquidity provided by D3M, the Spark platform uses a customized interest rate model where borrowing and lending rates are determined by governance members through on-chain voting, benchmarked against DAI's savings rate, currently at 1%, rather than fluctuating based on supply and demand like Aave or other lending protocols. Additionally, the interest rates are fixed regardless of the loan amount.

The PSM module connects to a large liquidity infrastructure, allowing for instant 1:1 exchange of DAI and sDAI to USDC, and vice versa.

As of the deadline, the website is still in the testing phase. For detailed instructions, please refer to: MakerDAO governance proposal | Plans to launch lending market Spark Lend! Forked from Aave v3

Phoenix Labs as the First Batch of Incubated Ecosystem Participants

Phoenix Labs is a development company dedicated to product innovation within the Spark Protocol ecosystem and is among the first batch of incubated ecosystem participants under the new Maker Endgame organizational structure. The company focuses on vertically integrating existing products into Maker and sharing the value created with developers.

In addition to Spark Lend, Phoenix Labs will continue to launch new products and features. The 2023 roadmap includes Spark fixed rates, flexible oracles, cross-chain support, Maker transfer support, and EtherDAI deployment.

Note: EtherDai ETHD is a new asset generated through "ETH already pledged" and integrates top-tier liquidity collateralized stablecoins, such as Lido Finance's stETH.