MakerDAO Announces Spark Protocol: A Competitor to Aave

Old Maker is dead. Long live the new Maker.

MakerDAO recently announced the launch of Spark Protocol, a new lending protocol that competes with Aave.

This is a significant departure from Maker's previous strategy of integrating DAI into existing DeFi protocols.

In this post, I’'ll take a closer look at what this announcement means and how it fits into Maker's new, more aggressive strategy.

Integrating DAI into Leading DeFi Protocols

Maker's previous strategy was to integrate DAI, its stablecoin, into leading DeFi protocols like Aave and Compound. For example, Maker enabled the Dai Savings Rate (DSR) with a 1% APY yield, expecting Aave or Compound to integrate DSR, and USDC holders would move to DAI.

However, that did not happen, leading Maker to explore other options.

Forking Aave v3 with DSR Integration and EtherDAI

Maker has decided to fork Aave v3 with DSR integration and EtherDAI at the center.