US Crypto Traders Take Another Hit As MakerDAO Blocks Access To DeFi Lending Platform
Popular decentralized finance (DeFi) platform MakerDAO has blocked US-based users’ access to its lending platform Spark Protocol. However, it remains unclear when Spark Protocol implemented this measure to restrict US users.
Extra Efforts To Restrict US Users?
In what seems to be an effort to enable the implementation of the ban, Spark Protocol has also blocked users using Virtual Private Networks (VPNs) from using the platform.
Confirming the block on US-based users and those using VPNs, Spark Protocol’s Terms of Service reads:
ATTENTION: USE OF THE CREDIT PROTOCOL FUNCTIONS OF THE SITE BY PERSONS WHO ARE CURRENTLY OR ORDINARILY LOCATED OR RESIDENT IN THE UNITED STATES IS STRICTLY PROHIBITED, REGARDLESS OF THE USER’S IP ADDRESS. UTILIZING A VIRTUAL PRIVATE NETWORK OR OTHER METHOD TO CONCEAL A USER’S UNITED STATES RESIDENCE IS ALSO STRICTLY PROHIBITED AND MAY RESULT IN PERMANENT BLOCKING OF USE OF THE SITE IN CONNECTION WITH BLOCKCHAIN ADDRESSES SUSPECTED OF BEING TIED TO A UNITED STATES RESIDENCE.
This measure not only cuts off US users trying to circumvent the block but also those who may be using a VPN for privacy reasons.
A Move Against Decentralization By MakerDAO?
Spark Protocol’s move goes against one of the key essences of decentralization – Data Ownership and Privacy. Furthermore, this means that not only the platform may not be as decentralized as many thought it to be, but it is also not censorship-resistant which is one of the main goals of the decentralized web – to create infrastructures that enable free speech.
Some proponents of privacy and decentralization have heavily criticized the lending platform’s action. One of them happens to be DeFi analyst Chris Blec who called out Spark Protocol as this move is “an actual war on privacy,” which is one of the ideologies of decentralization.
Blec’s Tweet read:
I rarely get as disgusted as I am right now with MakerDAO’s Spark Protocol. It’s one thing to block US residents. It’s a whole other thing to block anyone in the entire world who is using a VPN for privacy. This isn’t just govt cuckery. This is an actual war on privacy.
When quizzed by a Twitter user about what he suggests should be done differently, Alec replied that MakerDAO should “shut down the entire project.”
There is reason to believe that Maker’s controversial measure may be causing the platform to see reduced user interest. Maker’s founder Rune Christensen recently tweeted that the platform had implemented an Enhanced Dai Savings Rate (EDSR) to motivate users due to the low utilization of the feature.
According to Christensen, “The rate is so high is because there are currently not that many people using the Dai Savings Rate – only about 8% of Dai holders use DSR currently. This causes the Enhanced DSR system to increase the rate to attract more users. Once more users arrive, the rate will go back down.”
Spark Protocol, launched in May by Maker, purportedly offers users 8% annual returns by lending their DAI tokens.
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US Crypto Traders Take Another Hit As MakerDAO Blocks Access To DeFi Lending Platform
Popular decentralized finance (DeFi) platform MakerDAO has blocked US-based users’ access to its lending platform Spark Protocol. However, it remains unclear when Spark Protocol implemented this measure to restrict US users.
Extra Efforts To Restrict US Users?
In what seems to be an effort to enable the implementation of the ban, Spark Protocol has also blocked users using Virtual Private Networks (VPNs) from using the platform.
Confirming the block on US-based users and those using VPNs, Spark Protocol’s Terms of Service reads:
ATTENTION: USE OF THE CREDIT PROTOCOL FUNCTIONS OF THE SITE BY PERSONS WHO ARE CURRENTLY OR ORDINARILY LOCATED OR RESIDENT IN THE UNITED STATES IS STRICTLY PROHIBITED, REGARDLESS OF THE USER’S IP ADDRESS. UTILIZING A VIRTUAL PRIVATE NETWORK OR OTHER METHOD TO CONCEAL A USER’S UNITED STATES RESIDENCE IS ALSO STRICTLY PROHIBITED AND MAY RESULT IN PERMANENT BLOCKING OF USE OF THE SITE IN CONNECTION WITH BLOCKCHAIN ADDRESSES SUSPECTED OF BEING TIED TO A UNITED STATES RESIDENCE.
This measure not only cuts off US users trying to circumvent the block but also those who may be using a VPN for privacy reasons.
A Move Against Decentralization By MakerDAO?
Spark Protocol’s move goes against one of the key essences of decentralization – Data Ownership and Privacy. Furthermore, this means that not only the platform may not be as decentralized as many thought it to be, but it is also not censorship-resistant which is one of the main goals of the decentralized web – to create infrastructures that enable free speech.
Some proponents of privacy and decentralization have heavily criticized the lending platform’s action. One of them happens to be DeFi analyst Chris Blec who called out Spark Protocol as this move is “an actual war on privacy,” which is one of the ideologies of decentralization.
Blec’s Tweet read:
I rarely get as disgusted as I am right now with MakerDAO’s Spark Protocol. It’s one thing to block US residents. It’s a whole other thing to block anyone in the entire world who is using a VPN for privacy. This isn’t just govt cuckery. This is an actual war on privacy.
When quizzed by a Twitter user about what he suggests should be done differently, Alec replied that MakerDAO should “shut down the entire project.”
There is reason to believe that Maker’s controversial measure may be causing the platform to see reduced user interest. Maker’s founder Rune Christensen recently tweeted that the platform had implemented an Enhanced Dai Savings Rate (EDSR) to motivate users due to the low utilization of the feature.
According to Christensen, “The rate is so high is because there are currently not that many people using the Dai Savings Rate – only about 8% of Dai holders use DSR currently. This causes the Enhanced DSR system to increase the rate to attract more users. Once more users arrive, the rate will go back down.”
Spark Protocol, launched in May by Maker, purportedly offers users 8% annual returns by lending their DAI tokens.
Read More