Spark Interest Rates
Market vs Policy Interest Rates
Market Rates: All non-USDS and non-DAI assets on Spark use market-determined interest rates that adjust dynamically with utilization—just like on Aave or Morpho. As borrowing demand rises and utilization increases, rates climb to attract more liquidity; when demand falls, rates decline.
Policy Rates: In contrast, USDS and DAI follow a policy-driven rate model. Their rates are set directly through governance rather than by market utilization.
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Sky Governance sets the Dai Savings Rate (DSR) and Sky Savings Rate (SSR)—these define the liquidity rate that suppliers (Maker/Sky) earn in Spark.
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Spark Governance sets a fixed borrow spread, which is added on top of the DSR or SSR to determine the variable borrow rate paid by borrowers.