Spark Tightens Collateral Leading to Business Loss, But Ensures Liquidity Safety
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Summary
BroadChain learned that at 15:30 on April 20, according to PANews, Spark's strategic lead monetsupply.eth stated that the protocol has been deprecating low-usage assets such as rsETH since January and continuously tightening its collateral scope and feature set. As Spark set a relatively high maximum borrowing rate for the SparkLend ETH market, while Aave lowered its maximum ETH borrowing rate to below 10%, users shifted to borrowing on Aave, causing Spark to lose significant business and revenue over the past year. However, in the current market environment, SparkLend still maintains sufficient ETH withdrawal liquidity, while Aave on the main
BroadChain has learned that at 15:30 on April 20, according to PANews, Spark's strategic director monetsupply.eth stated that the protocol has been phasing out low-usage assets such as rsETH since January and continuously tightening the collateral scope and feature set. Due to Spark setting a higher maximum borrowing rate for the SparkLend ETH market, while Aave reduced the ETH maximum borrowing rate to below 10%, users have shifted to borrowing from Aave, causing Spark to lose significant business and revenue over the past year. However, in the current market environment, SparkLend still maintains sufficient ETH withdrawal liquidity, whereas Aave's WETH reserves on Mainnet, Arbitrum, Plasma, Mantle, and Base are in a frozen state. Spark emphasized that ETH, as a core collateral asset, faces liquidity shortages that not only affect depositors' withdrawals but, more critically, prevent the liquidation of ETH collateral when utilization reaches 100%, posing a serious security risk. Under Aave's current liquidity conditions, if the ETH price drops by 15-20%, it could lead to a significant accumulation of bad debt.