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The price of Maker (MKR) has been on the decline even after MakerDAO launched the Spark protocol yesterday. At press time, MKR was trading at $671.41, down 5.41% over the last 24 hours.
The new Spark Protocol, which started operating today is available for all users to lend and borrow Ethereum (ETH), stETH, DAI, and sDAI.
Making borrowing and lending more accessible
The newly launched Spark protocol aims to make borrowing and lending on MakerDAO more accessible and efficient for users. It is the most recent MakerDAO innovation as it pushes to bring more innovation into the DeFi space.
One of the most notable Spark features is the ability to borrow funds without collateral. Users will be able to borrow funds without having to deposit any assets as collateral. This makes borrowing more accessible even to users who may not have enough assets to use as collateral when borrowing funds.
Another feature is the ability for users to set flexible interest rates. Users can set their own interest rates, thus allowing them to negotiate more favourable terms with lenders.
The Spark protocol also offers a unique auction mechanism allowing users to bid on loans. This new feature makes the borrowing process more competitive and transparent and ensures that lenders receive fair market value for their funds.
Why is the price of Maker (MKR) dropping?
Contrary to the expectation of most crypto traders, the price of Maker (MKR) which is the native token of Maker and governance token of MakerDAO, has continued to drop despite the positive news of the Spark protocol launch.
The reason why the Spark launch did not have an impact on the price of MKR is mainly because MKR is not in any way affiliated with the Spark Protocol. Interestingly, MKR is also not among the cryptocurrencies that users will be able to borrow or lend on Spark.
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