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.
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.
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.
