MakerDAO has been in the blockchain industry as the creator of one of the most popular stablecoins – DAI. Looking ahead, the project has launched the Spark protocol, a platform designed to transform the landscape of decentralized lending and borrowing.
Speaking at the ETHCC Paris, Tadeo, a key contributor to the project, described how the Spark protocol is transforming the Web3 industry for users.
The Spark protocol is a decentralized and non-custodial liquidity platform that allows users to participate as suppliers, borrowers, or liquidators.
Suppliers contribute liquidity to the market and can earn interest on the assets they provide, while borrowers can obtain loans in an overcollateralized manner.
Notably, borrowers can also engage in one-block borrowing transactions, commonly referred to as “flash loans,” which do not necessitate over-collateralization.
Tadeo added that Spark protocol, which is tailored specifically for DAI, integrates the concept of predictable rates, a novel approach that offers users an unprecedented level of certainty.
Predictable rates are predefined by governance, affording borrowers and depositors a transparent and stable lending experience.
While “predictable rates are nothing new,” they are not always discussed. She also pointed out that in the midst of several fixed rate protocols coming up, having predictable rates in DeFi “provides a great user experience: as these rates are determined by governance.
Conduits on MAkerDAO
Furthermore, she added that to facilitate seamless fund movement within the ecosystem, MakerDAO is introducing “conduits” — these standardized interfaces to ensure consistency in transferring funds from MakerDAO and sub-dials to yield opportunities.
Built as Singleton contracts, these conduits present a uniform method for interaction, enabling various entities to utilize the same contracts for streamlined transactions. She compared Conduits on MakerDAO to what Hooks does on Uniswap.
Tadeo outlined a strategic separation of concerns as an essential facet of Maker’s endgame. Systemic risk management is entrusted to Maker Core, while novel entities known as sub-dials assume the role of capital allocators.
These sub-dials operate independently, each holding a credit line from Maker to allocate capital for high-yield opportunities.
Sub-Dials on MakerDAO
She also added that MakerDAO has included Sub-Dials into the ecosystem for efficiency. Sub-dials emerge as pivotal players in the Maker ecosystem, each aiming to optimize capital allocation for maximum effectiveness.
With a focus on yielding opportunities, these entities undertake profit-sharing models with Maker, thereby aligning their interests with the project’s success.
The future of MAkerDAO – Endgame
Overall, she highlighted the changes that MakerDAO is implementing as a plan for a better future. Tadeo discussed this as Maker’s endgame vision, emphasizing its impact on both the protocol and the MakerDAO organization.
This phase involves significant changes in capital allocation, liquidity provision, and the stablecoin DAI. Maker aims for an open and unbiased financial system, requiring a strategic approach across various aspects.
From Spark Protocol, for borrowers and depositors, to Conduit for Developers and more, she noted that MakerDAO promises to reshape decentralized finance, revolutionizing capital allocation and transactions.
