The Growing Value of Gnosis Chain
The value locked on Gnosis Chain, an Ethereum sidechain, has experienced a significant increase, reaching approximately $150 million from its previous value of $75 million since October. This surge in value coincides with a rise in transactions and fees on the network.
Utilizing MakerDAO’s Spark Lending Protocol
A significant portion of this increase can be attributed to the transfer of $50 million in stablecoins to Gnosis Chain. These funds are being utilized to secure an enhanced savings rate through MakerDAO’s Spark lending protocol, which currently offers rates exceeding 7%.
Bridging to Gnosis Chain
Users have been bridging their xDAI to Gnosis Chain, converting them into Savings xDAI. This allows them to earn interest from all sDAI held by the mainnet bridge.
Gnosis Chain and Its Features
Gnosis Chain, previously known as xDai Chain, operates alongside Ethereum and is governed by GnosisDAO. The sidechain is secured by its native staking token, Gnosis (GNO), and hosts various decentralized applications such as Perpetual Finance, SushiSwap, HoneySwap, Curve Finance, and POAPs.
Spark Protocol Expands to Gnosis Chain
On October 10th, Spark Protocol, a decentralized finance lending platform from MakerDAO focused on DAI, deployed on Gnosis Chain as part of its multi-chain strategy. This marked the platform’s first expansion beyond Ethereum and allowed users on the sidechain to access the DAI savings rate as well.
This move is particularly notable as it is the first time a MakerDAO-affiliated DeFi product has been launched on a blockchain other than Ethereum.
Transferring DAI to Spark Protocol’s Vault
Following the deployment, contributors to Gnosis Chain approved a measure to transfer a majority of the DAI on its bridge with the Ethereum Mainnet into Spark Protocol’s sDAI vault. This arrangement enables xDAI holders to continue accessing the Dai Savings Rate yield available on the mainnet. Previously, there had been a decline in DAI being moved to the mainnet to access Spark.
Hot Take: Gnosis Chain’s Growth and Expansion
The value locked on Gnosis Chain has experienced a significant increase, driven by users leveraging MakerDAO’s Spark lending protocol and bridging their xDAI to the sidechain. This growth highlights the demand for enhanced savings rates and alternative blockchain platforms for decentralized finance applications. With Gnosis Chain expanding its ecosystem of decentralized applications, it is becoming an attractive option for users seeking diverse opportunities within the crypto space.
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