MakerDAO's Spark Protocol Blocks VPN Users In Bid To Prevent Fraud

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MakerDAO’s Spark Protocol Blocks VPN Users access, Spark Protocol has blocked access to users connecting to its platform through a Virtual Private Network (VPN). The move has been met with criticism from some users who believe that it is a violation of their privacy.

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MakerDAO’s is an decentralised (Defi) platform which allows users to lend and borrow Cryptocurrency. Spark Protocol is an new lending platform which was launched by MakerDAO’s in may 2023.

In recent service update, Spark Protocol Announced that they will discontinue the users connecting through VPN. This decision was made to ” Stop frauds and abuses “.However, some users critisized this decision by saying that it is breach of their privacy. They are arguing that users uses VPN for valid reasons, Such as to avoid tracking of their online activities from Governments or Corporations.

MakerDAO’s defended their decision by saying that “it was important to restrict frauds , scams and Abuse”. Company said that they have seen increasing fraud activities on Spark Protocol, and suspending VPN users is an only solution to avoid them.

The controversy over Spark Protocol’s VPN ban is the latest privacy related issue that have raised in the DeFi space. In recent months, several worries have raised in Defi Space such as decrease in privacy as well as tracking and freezing of cryptocurrencies by Governments.

Suspension of VPN by Spark Protocol has raised many questions on future of privacy in Defi Space. While it is important to see, whether other platforms also follow this decision and whats is its effect on privacy of users.

Impact of the VPN ban

VPN ban has had an significant impact on Spark Protocol. After the implementation of Ban in weeks, the number of active users on spark protocol has dropped down by 50%.

The ban had negative impact on the volatility of the market. While less number of user can access the platform, so the demand of assets trade-able at Spark Protocol is low.

Privacy implications of the VPN ban

VPN ban by Spark Protocol has raised worries for the Privacy of Users. VPN is used by many peoples for many specific reasons, which includes to avoid tracking of their online activities from Governments or Corporations.

By Suspending VPN users, Spark Protocol is making it difficult to protect the privacy of users. It will result in negative impact on those users who are worried about their Privacy.

Future of Privacy in DeFi

Spark Protocol’s VPN ban is sign of those challenges which are faced by DeFi platforms to protect the privacy of users. As the popularity of DeFi platforms is increasing , they are facing the scrutney by governments and regulators.

It is important to watch out that how the DeFi Platforms balances the protection of user’s Privacy by following the rules. However, MakerDAO’s Spark Protocol’s VPN Ban will result in Big issue for the users Privacy in the future.

Conclusion

Spark Protocol’s VPN ban is an controversial fact which has raised important questions on future of DeFi privacy. While it is important to watch the reaction of other Defi Platforms, and how this will effect the privacy of users. However, Spark protocols VPN ban is sign of those Challenges which are faced by DeFi platforms in protecting the privacy of their users.