Things this month weren’t looking as hot as they were back in January as narrative rotations are cooling down and price pumps getting weaker. Stablecoin outflows, total market cap, exchange volume, DEX volume, on-chain activity, DeFi TVL - none of it ever really resurged over the past month as money just shifted from narrative pumps to narrative pumps. It’s essential to pay attention to every FED move as its influence might be the cherry on top of the cake that topples the current frail castle of cards.
Time moves differently in crypto. Crypto is an intricate game filled with various players operating across multiple time frames and with varying agendas. Day in, day out, the pieces are moving all across the board. Sometimes for the better and sometimes for the worse. Use all events like clues - let it tell you the larger overarching story of crypto.
Total Crypto Market Cap: $1.133T (+2.16%)
DeFi TVL: $49.41B (+1.37%)
Stablecoins: $134.94B (-1.61%)
The team formerly known as Crimson Cluster announced early February the launch of Phoenix Labs, a Research & Development company that focuses on vertically integrating existing products into MakerDAO and “sharing the value creation with developers”. Their mission is to help MakerDAO grow and innovate in the decentralised realm. With that goal in mind, they’ve introduced Spark Protocol, a decentralised lending and borrowing platform that is designed to operate as a "growth-focused arm" of MakerDAO. The Spark Protocol aims to enhance the functionality of MakerDAO by providing a lending platform that is designed to be highly scalable, efficient, and flexible.
Announcing Phoenix Labs and Spark Protocol
MakerDAO will own every product that Phoenix Labs creates, inheriting Maker’s already well-established governance system. Maker Governance will administer all smart contracts with polls to adjust system parameters and add new collateral. More products are in the pipeline to be released later this year such as Spark Fixed Rates, Resilient Oracles, cross-chain support, Maker teleport support, and bootstrapping of EtherDAI - a synthetic Liquid Staking Derivative for Ether that will be pegged at a one-to-one ratio with ETH.
This new money market is none other than a fork and competitor to Aave - it is definitely a sharp turn from Maker's old benign strategy of integrating DAI, the stablecoin, into existing the DeFi ecosystem. By building on top of Aave V3’s stack, Spark Lend will take advantage of a credit line from Maker called a DAI Direct Deposit Module (D3M), whilst paying a 10% fee from all revenue to Aave.
It's no surprise that Maker would join the vertical integration arms race when you think about it - Aave is about to launch its own DeFi stablecoin GHO, a clear competitor to DAI as well as Curve, launching its stablecoin crvUSD.