MakerDAO, a pioneer in decentralized finance (DeFi), has announced the launch of Spark Protocol, a lending and borrowing system deployed on the Ethereum network.

Spark Protocol, an end-user DeFi product, features supply and borrow functionalities for ETH, stETH, DAI, and sDAI. The protocol’s first product, Spark Lend, allows users to lend and borrow crypto using Maker’s native stablecoin, DAI.

The platform also introduces a tokenized version of DAI, called sDAI, deposited in the DAI Savings Rate (DSR). Spark Protocol is connected to Maker’s liquidity balancing system, D3M, which uses DAI to maintain liquidity in Spark Lend.

The platform also uses a Peg Stability Module (PSM) that connects the liquidity infrastructure for instant swapping of DAI and sDAI for USDC.

MakerDAO’s focus on stability and liquidity comes amid a growing wariness among DeFi users of unsustainable yield promises and high risk.

Spark Protocol is part of MakerDAO’s Endgame plan, which proposes to make DAI a free-floating asset, initially collateralized by real-world assets (RWA). Under the Endgame plan, DAI will remain pegged to the dollar for three years.

Maker plans to accumulate as much Ethereum (ETH) as possible to increase the ratio of decentralized collateral.

With a circulating supply of $4.7 billion, DAI is currently the industry’s largest decentralized stablecoin, holding a market share of 3.6%. DAI supply has declined by 53% since its peak of almost $10 billion in February 2022.