DeFi Giant MakerDAO to Introduce Aave Rival Dubbed Spark Protocol

The protocol is a fork of Aave v3 and will increase the use case for the DAI stablecoin.

AccessTimeIconFeb 9, 2023 at 11:33 a.m. UTC
Updated May 9, 2023 at 4:07 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

MakerDAO, the decentralized finance (DeFi) giant that facilitates the generation of the DAI stablecoin, is releasing a lending platform that will rival Aave, one of Ethereum's largest DeFi products.

Spark Protocol, which is a fork of Aave's version 3 (v3), will be a front-end app that allows users to interact with DAI in the form of borrowing, lending and staking, according to an announcement on the MakerDAO forum.

  • How NEAR Enables Multichain Access From One Account
    00:56
    How NEAR Enables Multichain Access From One Account
  • DeFi Market Rebounds to $50B as Speculators Hunt for Yield
    01:11
    DeFi Market Rebounds to $50B as Speculators Hunt for Yield
  • How Spool Is Aiming to Help Institutions Enter DeFi
    11:05
    How Spool Is Aiming to Help Institutions Enter DeFi
  • How a New Tax Proposal From the IRS Could Impact DeFi
    00:46
    How a New Tax Proposal From the IRS Could Impact DeFi
  • The development of a dedicated lending protocol represents a shift in focus from MakerDAO, which has aligned its revenue model with the issuance of DAI since the latter's inception in 2017. MakerDAO has formed Phoenix Labs, a research and development company that will be tasked with building the Spark Protocol.

    Spark Protocol's emergence as a potential rival to Aave, which has $4.6 billion in total value locked (TVL), comes after Aave voted to introduce its own yield-generating stablecoin dubbed GHO last year.

    The new protocol will be reinforced by pricing oracles, or data sources, provided by Chronicle Labs and Chainlink to enhance security in case one of the two goes down or suffers an exploit.

    MakerDAO also announced the forthcoming deployment of etherDAI, a synthetic liquid staking derivative (LSD) for ether (ETH) that will be pegged at a one-to-one ratio with ETH. Liquid staking allows users to generate extra yield on top of standard rewards for staking tokens in a network.

    The MakerDAO token (MKR) is currently trading at $771.85 having risen by 1.39% over the past 24-hours, according to CoinDesk data.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Oliver Knight

    Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.



    Read more about