MakerDAO's Spark Protocol slammed over the restriction of VPN users

By: Henry Felix

MakerDAO's Spark Protocol slammed over the restriction of VPN users

August 7, 2023 7:57 AM

Users seeking to connect to Spark Protocol using VPN will be unsuccessful, drawing Criticism from advocates of privacy.

MakerDAO, one of the early adopters of decentralized finance, has recently come under fire for blocking VPN users from accessing its just released borrowing platform, Spark Protocol.

At the time of writing, VPN users attempting to gain access to the Spark Protocol website will encounter the following error: "Accessing the Spark Protocol website via VPN is not authorized."

An update→ to Spark Protocol's terms of service from May 9 warns about the use of VPNs to evade the restriction, suggesting a connection between the move and Maker's attempt to prevent users in the United States from using the crypto lending platform. 


The terms of service for Spark Protocol prevent US customers from utilizing 
a VPN to mask their US residency. Source: Spark Protocol.

On August 6, DeFi analyst Chris Blec tweeted→ his "disgust" at the decision, noting that it amounts to a global ban on VPNs rather than a domestic one in the United States.

"Blocking US residents is one thing. "It's quite another thing to prevent anyone in every country worldwide who relies on a VPN for privacy," said Blec, adding that it represents an "actual war on privacy."

In a follow-up tweet, Blec, a self-identified decentralization and privacy supporter, also aimed at MakerDAO's founder Rune Christensen and the firm's other developers, claiming that they had placed profits before user privacy:

"The underlying issue in this instance is the fact that these developers prioritize profit over principle." They prioritize their account balance over your privacy and rights."

The Spark Protocol, which was launched in May, allegedly gives users up to 8% in annual earnings by lending DAI. Phoenix Labs, a blockchain research and development organization founded by the Maker Foundation, established the lending platform as a soft fork of Aave v3.


Users must agree not to use a VPN when lending cryptocurrency via
Spark Protocol. Source: spark protocol

Spark Protocol is alleged to leverage TRM's blockchain intelligence services to blacklist Spark Protocol wallets that participate in illegal activity.