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High DAI yields and airdrop opportunism drives impressive growth for MakerDAO’s Spark Protocol

Spark Protocol, a DAI-focussed fork of Aave and MakerDAO’s first subDAO, has surpassed $1B worth of total value locked.

Spark’s TVL briefly crossed $1B for the first time on Nov. 14, before firmly reclaiming the ten-figure threshold the next day. Spark currently boasts a TVL of $1.05B, ranking as the 16th-largest DeFi protocol, according to DeFi Llama.

While Spark’s TVL has enjoyed growth as digital asset prices rose amid the recent crypto rally, the protocol also received significant inflows this month. Spark took in $113.5M on Nov. 2 — its fourth-largest daily inflow on record — followed by the protocol’s seventh-largest inflows of $65.8M on Nov. 14.

Users also withdrew $30M from Spark on Nov. 13 and $35M on Nov. 16, rounding out the protocol’s only significant outflows for November.

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Spark Protocol capital flows. Source: DeFi Llama.

Spark’s debt ceiling is currently at its maximum capacity of $400M. However, the limit will increase by double to $800M this week.

Spark’s growth has been propelled by increased yields offered by the DAi Savings Rate (DSR) — which Spark users can access — in addition users hoping to qualify for a future Spark airdrop.

MakerDAO launched Spark in May, comprising a major milestone in its Endgame roadmap. Endgame called for the reorganization of MakerDAO into a series of specialized “subDAOs” with distinct operations and governance, with Spark comprising the project’s first metaDAO deployment.

In August, Rune Christensen, the controversial founder of MakerDAO, proposed a retroactive airdrop distributing a native Spark token to early users. The rate of token issuance would fall every two years, incentivizing users to engage with the protocol during its first two years of operation.

However, no further progress has been made on the proposal.

The MakerDAO community recently passed a suite of proposals including Spark’s first revenue-sharing payment to Aave. Spark said it would share 10% of revenues with Aave for two years in exchange for Spark forking the code for Aave v3. The first payment distributed 2,889 DAI to an address controlled by Aave governance.

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