Rune Christensen, the founder of leading stablecoin issuer MakerDAO, has proposed the creation of a governance token for Spark Protocol and the distribution of this token to users via an AirDrop reward. According to the proposed governance offer, 2 billion Spark (SPK) tokens will be distributed over a period of ten years.
Details of the Proposed Governance Offer
Rune Christensen, the founder of stablecoin issuer MakerDAO, has put forward a governance proposal for the lending protocol Spark Protocol, suggesting the creation of a governance token and its distribution to users as a reward through a method called “pre-farming AirDrop”. The governance offer aims to encourage long-term user participation and proposes the distribution of 2 billion SPK tokens over a period of ten years to ensure the continuous usage of Spark Protocol.
Spark Protocol stands out as a lending protocol offered by MakerDAO, which provides DeFi credit directly by supplying liquidity from Maker. The protocol accepts assets such as Ethereum (ETH), staked ETH, and Dai (DAI) as collateral for borrowing.
Aim for Spark Protocol to Become an Independent subDAO
The ultimate goal of the governance proposal is for Spark Protocol to become an independent subDAO. This represents a significant step in MakerDAO’s endgame plan. A SubDAO operates as an independent, decentralized autonomous organization (DAO) within MakerDAO. As part of the endgame plan, DAOs such as Spark Protocol will be governed by their own tokens.
SubDAO tokens will be allocated to Spark Protocol borrowers using various assets as collateral and distributed proportionally based on borrowing amounts and durations. In his governance proposal, Christensen noted, “We want to create a user and DAO participant community that aligns with SparkDAO’s mission and potential.” Christensen also added that Spark Protocol aims to incentivize active usage by offering a 5% yield on deposits known as Enhanced Dai Savings Rate (EDSR).
EDSR for Spark Protocol increased to 8% earlier this week, resulting in a significant influx of capital as users took advantage of borrowing arbitrage opportunities. This means that users borrow Dai at lower interest rates and use it for higher returns in EDSR. Christensen stated that the rate will decrease to 5% due to the rapid surpassing of the interest rate set for Dai deposits in the coming days.
