MakerDAO Introducing Spark Protocol Lending Platform to Rival Aave Protocol
MakerDAO, decentralized finance (DeFi), is set to release Spark Protocol to improve DAI stablecoin utilization.
The release of the lending platform by MakerDAO is set to increase rivalry with Aave, regarded as the lead Ethereum-based DeFi product. Spark Protocol involves a fork mirroring Aave’s version 3. Its operation would involve front-end applications facilitating users’ interaction with DAI.
The announcement conveyed on the MakerDAO forum revealed that the interaction nature would involve borrowing, lending, and staking.
MakerDAO Releasing Lending Protocol
MakerDAO’s statement clarified that the lending protocol would offer dedicated services distinct from its existing operations. Previously, the DeFI giant has prioritized compatibility with its revenue model guided by DAI issuance, unchanged since its 2017 inception.
The announcement restated that MakerDAO established Phoenix Labs as the research and development entity to build the Spark Protocol. Introducing Spark Protocol to rival Aave comes hot on the heels of Aave’s total value locked (TVL) realizing $4.6 billion. Coincidentally, the Aave community approved a yield-generating stablecoin GHO in 2022.
Integrated Reinforcement in Spark Protocol
MakerDAO illustrated that the new protocol would derive reinforcement from oracle pricing. The statement indicated that Chronicle Labs would provide data sources while Chainlink would foster security if one suffers exploitation.
MakerDAO revealed it was deploying etherDAI. The DeFi giant illustrated that it would portray synthetic features of liquid staking derivative (LSD). The etherDAI would retain a matched pegging to ETH. The liquid staking will generate additional yield besides the conventional rewards obtained from staking tokens within the network.
Meanwhile, the MakerDAO token (MKR) exchanges hands at $771.8, 1.4% up in a day.
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