Summer.fi & Spark - Protocol Deep Dive #1
Yesterday Spark surprised us with a rebranding, so we thought it was the perfect time for a deep dive breaking down exactly how Spark works on Summer.fi, covering everything from the basics to advanced strategies for better yields.
What is Spark Protocol?
Spark is structured as a subDAO within Sky (formerly MakerDAO), which ties it closely with the DAI/USDS ecosystem. Through Spark, you can borrow USDS or DAI at a stable rate of 6.5% (subject to governance adjustments), making it a straightforward choice for those looking for stable borrowing options.
So, why use Spark on Summer.fi rather than directly on the protocol?
• Supply and Borrow in One Tx: Open lending and borrowing positions in a single transaction, saving time and reducing steps.
• Automations Built In: Set and forget your trading plan, keep emotions out, lock profits in.
• Yield Loops Made Simple: Easily maximize returns with loop strategies that boost yield potential in the underlying tokens.
• User-Friendly Interface: The intuitive UI keeps everything clear and easy to navigate, making it ideal for users of all experience levels.
What can you do on Summer.fi with Spark?
On Summer.fi, you can borrow assets on Spark, multiply your exposure to a particular asset to go long or short, and create yield loops to maximize earning potential. Whether you’re looking to take a straightforward loan, boost your holdings, or explore looping strategies, Spark on Summer.fi provides the flexibility and tools to make it happen.
Borrow
Borrowing on Spark through Summer.fi lets you access liquidity without selling your existing assets. You can borrow another asset, like USDS or DAI, at a competitive rate by putting up collateral- such as BTC. This allows you to get liquidity while keeping exposure to your original assets, giving you the flexibility to pursue new opportunities, cover expenses, or reinvest without liquidating your initial investments.
Multiply
Multiply is a powerful tool on Summer.fi that enables you to expand your positions by multiplying assets you already hold. By using borrowed funds to purchase more of an asset and repeating the process in a loop, you essentially “multiply” your exposure, amplifying potential returns. This strategy is ideal for users looking to make the most of favorable market conditions, as it allows you to expand your portfolio’s impact while remaining within your chosen risk level.
Earn
Earning with Spark on Summer.fi is a straightforward way to put your assets to work. This is especially appealing for users who want a more hands-off approach to growth, as it allows you to collect yield on your holdings. Summer.fi’s yield loops can further optimize these earnings, letting you maximize returns over time without constant manual intervention.
Have you heard of $SPK?
Yes, that's right, by using Spark on Summer.fi, you also farming $SPK tokens, this tokens will be lately used to govern Spark, and if $SPK tokens are not enough for you, by opening any Spark position, you're also earning $RAYS. If you still haven't heard about $RAYS, it's our points program developed to reward our users, and get ready for what's coming on Summer.fi in only a few months, you can learn more about it in the Lazy Summer litepaper.
How to Use Spark on Summer.fi
Getting started with Spark on Summer.fi is straightforward, even for new DeFi users. Here’s a quick guide:
1. Connect your wallet on Summer.fi: Once connected, choose Spark among the available protocols.
2. Choose Your Asset: Decide whether you want to lend, borrow, or both. Summer.fi lets you explore yield rates before committing.
3. Set Up Your Position: Whether depositing to lend or providing collateral to borrow, Spark on Summer.fi makes it simple. You’ll see clear, user-friendly prompts to guide each step.
4. Monitor and Adjust: With Summer.fi’s Position overview, you can track your positions, adjust parameters, and always have updated, clear information.
You can also check our Spark documentation here.
Bringing your position over to Summer.fi
If you already hold a position in Spark, the Migration feature on Summer.fi allows you to transfer it over and start managing everything through Summer.fi’s. By migrating, you unlock many advantages: you gain access to Summer.fi’s powerful automations, which can optimize and protect your position without constant manual input.
Plus, once managed through Summer.fi, your position is eligible to earn $RAYS points, giving you additional rewards for your activity.
More info about Migration in this post: https://blog.summer.fi/ready-set-migrate/
So, ready to start exploring Spark on Summer.fi?
Getting in touch
If you have any questions regarding Summer.fi, contact us at support@summer.fi or our social media.