MakerDAO (MKR) has introduced that Spark Protocol is onboarding Rocket Pool’s staked Ethereum (rETH) as a brand new collateral kind, creating elevated alternatives for customers to leverage their digital property within the DeFi ecosystem.
Increasing the lending ecosystem
Based in 2015, MakerDAO is finest identified for issuing the decentralized stablecoin, DAI. The most recent improvement in its partnership with Spark Protocol permits customers to make the most of their rETH holdings as collateral to borrow DAI at aggressive charges, whereas concurrently incomes staking yield.
Rocket Pool (RPL) is a decentralized Ethereum staking pool that gives customers with rETH, a tokenized model of staked Ethereum. With over 740,000 ETH at present staked within the protocol, the addition of rETH as a collateral kind on Spark Protocol furthers MakerDAO’s dedication to offering various collateral choices for borrowing its DAI stablecoin.
Sam MacPherson, CEO of Phoenix Labs, the main contributor to Spark Protocol, hailed the event as a step ahead for Ethereum’s liquid staking choices.
“This not solely diversifies Ethereum’s liquid staking choices but in addition strengthens the decentralization and safety of our system. For DeFi customers, this presents one other technique of borrowing DAI and availing of main rates of interest due to Spark’s distinctive place in securing liquidity straight from the Maker Protocol’s credit score line.”
The onboarding of rETH as collateral coincides with Maker Governance’s choice to extend the quantity of DAI that Spark Protocol can borrow, reinforcing the symbiotic relationship between the 2 DeFi platforms.
Launched in Could, Spark Protocol has shortly made a reputation for itself by offering the infrastructure for Spark Lend, a decentralized lending market with a give attention to DAI. Along with facilitating direct borrowing of DAI in opposition to numerous property, customers can even deposit ETH, earn charges, avail of the not too long ago elevated DAI Financial savings Fee (DSR), and swap stablecoins resembling DAI or USDC with no slippage.
MakerDAO’s real-world asset technique
This enlargement comes as MakerDAO continues to bolster its personal treasury holdings with U.S. authorities debt. In current months, MakerDAO has elevated its holdings of U.S. Treasury bonds from $500 million to $1.2 billion, marking a strategic pivot in the direction of conventional, low-risk property as a means of diversifying its collateral pool.
The choice to broaden MakerDAO’s publicity to real-world property was made following an incident the place its stablecoin, DAI, momentarily misplaced parity with the U.S. greenback. This transfer to diversify its holdings is seen as a part of MakerDAO’s broader technique to turn out to be extra resilient within the face of market volatility.
Allan Pedersen, CEO of Monetalis Group, which carried out the bond buy on behalf of MakerDAO, described the choice as a “robust, dependable, and versatile answer” that can generate extra income for the protocol.