Spark Protocol, MakerDAO's lending protocol, has raised the Dai Savings Rate (DSR) to 8%, meaning that users are able to earn an 8% APY when depositing $DAI. In comparison, the rate of borrowing $DAI is only 3.19%.
Rune Christensen, co-founder of MakerDAO, said that depositing $DAI on Spark Protocol has "no additional risk compared to holding $DAI".
"The rate is so high is because there are currently not that many people using the Dai Savings Rate - only about 8% of Dai holders use DSR currently. This causes the Enhanced DSR system to increase the rate to attract more users. Once more users arrive, the rate will go back down," he explained.
It's worth mentioning that Spark Protocol is not available for US or VPN users, which is heavily criticized by the crypto community. DeFi analyst Chris Blec said, "I rarely get as disgusted as I am right now with MakerDAO's Spark Protocol. It's one thing to block US residents. It's a whole other thing to block anyone in the entire world who is using a VPN for privacy. This isn't just govt cuckery. This is an actual war on privacy."
TokenInsight is dedicated to covering the most important and cutting-edge trends in the world of crypto. If you have information to share with us, please feel free to contact our email news@tokeninsight.com. Your trust will be well respected.
