Overview
Spark (formerly Spark Protocol, originally Spark Lend) is a lending protocol within the MakerDAO/Sky ecosystem, launched in 2023 as a fork of Aave V3. It serves as the primary lending interface for DAI and USDS borrowing, leveraging Maker's Direct Deposit Module (D3M) to provide deep liquidity and competitive borrowing rates. Spark was conceived as part of MakerDAO's strategy to vertically integrate lending services rather than relying on third-party protocols.
The protocol offers standard lending and borrowing functionality for major assets (ETH, wstETH, WBTC, stablecoins) with the key differentiator being its tight integration with the Maker ecosystem. The D3M pipes DAI/USDS liquidity directly from Maker to Spark, allowing borrowing rates to be effectively subsidized. This gives Spark a structural cost advantage for stablecoin borrowing.
Spark has grown rapidly since launch, reaching several billion in TVL. However, its identity is deeply tied to MakerDAO/Sky, making it subject to the same governance dynamics and rebrand confusion affecting the broader Maker ecosystem. The protocol's long-term independence and ability to differentiate beyond subsidized rates remain open questions.
Smart Contracts
Architecture
Spark is a direct fork of Aave V3, inheriting the pool-based lending architecture with configurable markets. The protocol maintains the same modular design with separate contracts for pool logic, interest rates, and oracles. Key modifications include D3M integration for Maker liquidity and custom interest rate models optimized for DAI/USDS markets.
Code Quality
As an Aave V3 fork, Spark benefits from one of the most reviewed codebases in DeFi. The Spark-specific modifications are open source and have been reviewed, though the fork introduces the need to track upstream Aave changes and security patches. Code quality is strong by inheritance.
Upgradeability
Spark uses the same proxy-based upgradeability pattern as Aave V3, controlled by Maker/Sky governance. This means Spark's upgrade path is tied to the broader Maker governance process, which adds bureaucratic overhead but also provides rigorous review.
Security
Audit History
Spark's Aave V3 base benefits from Aave's extensive audit history. Spark-specific modifications have been audited by MARSFOUNDATION auditors and reviewed by the Maker community. The protocol has undergone additional security reviews for D3M integrations and custom rate models.
Oracle Design
Spark uses Chainlink price feeds for most assets, consistent with the Aave V3 base. For DAI/USDS pricing, the protocol has specific considerations given its relationship with the Maker price stability module. Oracle configuration follows established Aave patterns with Maker governance oversight.
Liquidation Engine
Spark inherits Aave V3's liquidation mechanism — external liquidators can repay undercollateralized positions for a liquidation bonus. The mechanism is well-tested through Aave's years of operation, and Spark benefits from the same liquidation bot infrastructure serving Aave markets.
Track Record
Spark has not experienced any major security incidents since its 2023 launch. The protocol benefits from running the battle-tested Aave V3 codebase with relatively minimal modifications. However, its shorter operational history means less real-world stress testing compared to Aave itself.
Risk Management
Asset Listing
Spark supports a curated set of assets, significantly smaller than Aave's listings. New asset additions go through Maker/Sky governance, with risk assessments conducted by the Spark team and Maker risk contributors. The conservative listing approach prioritizes safety over breadth.
Risk Parameters
Risk parameters mirror Aave V3's framework: LTV ratios, liquidation thresholds, supply/borrow caps, and reserve factors. Parameters are tuned for Spark's specific market dynamics, with the D3M providing backstop liquidity. BA Labs and other risk contributors advise on parameter settings.
Isolation Modes
Spark inherits Aave V3's isolation and efficiency modes. The protocol uses eMode for correlated assets (ETH/stETH pairs) and isolation mode for riskier collateral types. The D3M integration provides an additional stability mechanism specific to DAI/USDS markets.
Adoption
TVL & Usage
Spark has grown to approximately $3-7B in TVL, driven primarily by ETH/stETH collateral and DAI/USDS borrowing. The D3M subsidy creates artificially competitive rates that attract TVL, though organic demand beyond subsidized borrowing is harder to gauge.
Multichain Presence
Spark is primarily deployed on Ethereum mainnet, with expansion to Gnosis Chain and exploration of additional L2 deployments. Its multichain footprint is significantly smaller than Aave's, reflecting its more focused positioning within the Maker ecosystem.
Integrations
Spark integrates with major DeFi aggregators and is the primary lending venue for DAI/USDS within the Maker ecosystem. The SparkLend interface serves as a user-friendly entry point to Maker's lending capabilities. Integration with Morpho vaults has also brought additional liquidity.
Tokenomics
Token Overview
Spark does not have its own token as of early 2026. The protocol operates under MakerDAO/Sky governance using MKR/SKY tokens. There have been discussions about a future SPK token, but no confirmed launch. This lack of independent tokenomics limits Spark's ability to incentivize independently.
Revenue Model
Spark earns revenue through reserve factors on lending activity. However, the D3M subsidy model means that some revenue effectively recirculates within the Maker ecosystem. The protocol's revenue is entangled with Maker's broader economic model, making standalone assessment difficult.
Governance
Spark is governed through MakerDAO/Sky governance, with the Spark team operating as a subDAO/Star within the Maker ecosystem. This means Spark's strategic decisions are subject to Maker's governance dynamics, including the ongoing Endgame restructuring and associated politics.
Risk Factors
- Maker Dependency: Spark's viability is fundamentally tied to MakerDAO/Sky's health and governance decisions. If Maker governance becomes dysfunctional, Spark suffers directly.
- Fork Risk: As an Aave V3 fork, Spark must track upstream security patches and risks diverging from the base codebase over time. Custom modifications may introduce vulnerabilities not present in Aave.
- Subsidized Growth: Much of Spark's TVL is driven by D3M-subsidized rates rather than organic competitive advantage. If subsidies are reduced, TVL retention is uncertain.
- No Independent Token: The absence of a dedicated token limits Spark's ability to build independent community engagement and long-term incentive alignment.
- Rebrand Confusion: As part of the MakerDAO/Sky ecosystem, Spark is caught in the broader rebrand confusion. Users may be uncertain about the relationship between Maker, Sky, and Spark.
Conclusion
Spark represents a logical strategic move for the MakerDAO/Sky ecosystem — vertically integrating lending to capture the full value chain of stablecoin issuance. The Aave V3 fork provides a proven technical foundation, and D3M integration offers genuinely competitive borrowing rates for DAI/USDS that few protocols can match.
However, Spark's tight coupling with MakerDAO/Sky is both its greatest advantage and limitation. The protocol lacks independent identity, tokenomics, and governance, making it difficult to evaluate apart from the broader Maker ecosystem. The subsidized growth model, while effective at attracting TVL, raises questions about organic sustainability.
Spark is best understood as a feature of the MakerDAO/Sky ecosystem rather than an independent lending protocol. For users within the Maker ecosystem seeking DAI/USDS liquidity, it offers compelling rates. For those seeking a standalone lending solution, Aave or Compound may provide more independence and broader asset coverage.