Bankless: Spark—Maker’s DeFi rising star

Author: William M. Peaster, Bankless; Compiled by: Deng Tong, Golden Finance

Earlier this week, we announced the latest plans for Maker’s ambitious Endgame roadmap. A major part of this transition involves the Spark community launching Maker’s first SubDAO along with the SPK token.

We’ve covered Spark Protocol before, but Maker is probably my favorite DeFi project, so I wanted to take a deeper look at what they’ve been up to over the past year.

Back in 2018 I started using the first implementation of Maker to borrow the DAI stablecoin in ETH with the idea of ​​paying for it in real life while avoiding tax implications and without having to sell my of ETH.

In 2019, I participated in the migration from the single-collateral DAI system to the modern multi-collateral DAI architecture, creating one of the first-ever 200 MCD vaults, and I am still involved today, nearly 5 years later. using it.

Having said that, I am a long-time Maker user, and from that perspective, the most noteworthy in recent years One of the things that's happening is the rise of great new tools surrounding the protocol. Two projects that come to mind here are Summer.fi and Spark.

Currently, Spark (a DAI lending protocol) is particularly interesting because: p>

Over the past six months, the total value locked has tripled to $3 billion. Shows real attraction and motivation.

It is the core pillar of the Maker Endgame plan and, in my opinion, This is the most ambitious DeFi evolution today.

As part of the Endgame process, Maker will introduce new infrastructure to its ecosystem, all designed to enhance the attraction and retention of capital within its network. One of the new infrastructure pillars here will be enabled by the launch of SparkDAO, marking the official debut of Maker’s SubDAO system, alongside the protocol’s launch of the SPK token.

So, long story short, Spark develops one of the best, most proven, and most promising DeFi projects. The price of DAI is very good. And it has a token coming. Certainly, this is a project worthy of attention at the moment.

Looking closer, Spark has two main products: SparkLend and sDAI.

SparkLend is a money market protocol where users can lend or borrow DAI. It plugs directly into Maker and integrates with other top DeFi protocols like Aave, so its DAI liquidity is best-in-class.

As for sDAI, Savings DAI, it is a stable currency that earns interest through the ERC-4626 of DAI in Maker’s Dai Savings Rate (DSR) module Wrapper comes into play. By converting DAI to sDAI on Spark, holders can earn revenue generated by the entire Maker ecosystem while still having the flexibility to use their sDAI in other DeFi applications.

If you are interested in getting started with Spark, I personally recommend starting with sDAI. It's simple: deposit DAI, then hold or use sDAI, earn yield over time, then convert back to DAI on Spark at any time. That's all it takes! Currently, savers earn 15% per year, which is great, especially if you are a regular user of Maker and DAI.

However, as with any project in DeFi, there are potential smart contract risks, such as potential bugs. Spark has been audited and the underlying Maker protocol is a proven bastion, but still don't deposit more than you can afford to lose anywhere, even with something like Spark.

Also, I hate to be the bearer of bad news, but sorry to my fellow Americans: the Spark frontend is geo-blocked to US users. Even VPNs are blocked. This isn’t Spark’s fault, it’s the fault of US political leadership that allowed an anti-crypto environment to take root in the US.

It’s sad, but this is the unfortunate reality facing DeFi in the United States today. If you find this atmosphere ridiculous and you are American, I encourage you to call or write your local congressional representative and let them know why you can't use a program like Spark when you are a free man is ridiculous. A nation that loves freedom!

In the meantime, for everyone else, look out for the debut of the SparkDAO and SPK tokens, which The token is scheduled to launch in May 2024. This will be one of the early important steps in Maker’s transition to Endgame. Additionally, keep up to date with the latest happenings in Spark by following BlockAnalitica and DeFiLlama’s Spark dashboards.