Transparent borrowing

Everything you
need to know

What are spark.fi and SparkLend?

SparkLend is a decentralized, non-custodial liquidity market protocol where users can participate as lenders or borrowers. The spark.fi app provides a seamless front-end gateway, offering an interface for accessing SparkLend features.

How does SparkLend offer transparent rates at scale?

SparkLend's USDS borrowing rates remain unaffected by the USDS liquidity utilization, meaning the borrowing rate stays the same regardless of the borrowed amount. Since the USDS liquidity is sourced from the Sky Protocol, borrowing rates are set through Sky Ecosystem Governance and adjusted via on-chain voting after a proposal is submitted by the respective risk management team of the Sky Ecosystem. This process allows the community to know about borrowing rate changes and communicate them through SparkLend’s communication channels, promoting pre-deployment transparency.

What makes SparkLend unique?

SparkLend enables users to borrow the decentralized stablecoin USDS using a curated selection of crypto assets like ETH, stETH, weETH, rETH, and cbBTC as collateral. With SparkLend, borrowing rates remain transparent and unaffected by utilization, even at high scales.

How is the USDS borrow rate determined?

The USDS borrowing rate is set through Sky Ecosystem Governance via on-chain voting. Proposals for rate adjustments are submitted by the ecosystem’s risk management team and initially posted in the Sky forum for community review. They are then voted on-chain, with all information transparently accessible at vote.makerdao.com. Borrow rate changes are also communicated through Spark official channels, including X and Discord.

How do I interact with SparkLend?

You can access SparkLend via the app.spark.fi web app. by simply connecting your Ethereum wallet. Eligible collateral from SparkLend’s available assets list is available on the markets page. Once connected, eligible users can begin using the Easy Borrow Flow. There is a detailed tutorial available for guidance. Please be aware that interacting with web apps can present risks, and it’s important to ensure that you are using the official app.spark.fi website.

What are the risks of using SparkLend?

While SparkLend employs robust security measures, participating in decentralized finance (DeFi) platforms can present risks. These risks include, but are not limited to:

• Frontend Interface Risk: Risks associated with the use of the web app. interface, including but not limited to: Phishing Attacks, DNS Hijacking, and Frontend Code Compromise.
• Smart Contract Risk: Potential vulnerabilities or bugs within the protocol code that could be exploited.
• Market Risk: Fluctuations in the market value of collateral assets, which may affect your borrowing positions.
• Liquidation Risk: The risk that your collateral may be liquidated if its value falls below the required threshold.
• Technological Risk: Issues related to blockchain technology, such as network congestion or failures.
• Governance Risk: Potential issues with malicious proposals, low voter turnout, governance capture by large tokenholders, and unforeseen changes to protocol rules, which can lead to instability or exploitation.

No platform can be considered entirely risk-free. Steps have been taken to minimize risk as much as possible. The protocol code is public, and open source, and has been audited. Additionally, you can find security-related information in the security and audits sections.