MakerDAO Announces Proposal For A New Protocol Based On Its Competitor’s Lending Protocol’s Smart Contracts

MakerDAO has announced in the MakerDAO governance forum their proposal about a new protocol called ‘Spark Protocol’. The proposal made by the Phoenix Labs team aims to leverage Maker’s DAI stablecoin and its crypto assets for liquidity. 

The Spark Protocol will enhance the features of MakerDAO by allowing a liquidity market for supplying and borrowing crypto assets with variable and fixed rates. In addition, its first product ‘Spark Lend’ allows users to borrow DAI tokens at a set DSR of 1% and will support highly liquid crypto assets such as ETH, DAI, and wrapped derivatives as collateral. Soon enough, the Spark Lend feature will also include fixed-term yield products and Maker’s LSD called EtherDAI. 

MakerDAO aims to launch Spark protocol in April in which they are set to open a DAI lending vault on Maker with a $200 million debt ceiling but it’s still subject to voting by the Maker community.

Meanwhile, researchers have been expecting that Aave or Compound would integrate with DSR and that USDC holders would move to DAI. Apparently, nothing happened. It seems that MakerDAO decided to move along with a new ecosystem. 

On the other hand, MakerDAO’s rival Aave is about to launch a soon-to-be DAI’s rival stablecoin ‘GHO’ while Compound has recently launched its version 3 stablecoin with only USDC as its borrowing support while other crypto assets are supplied as collateral.

Either way, this proposal would definitely mark a milestone for Maker since Spark protocol will be the first native Maker-based lending interface.