MakerDAO Community to Vote on Proposal Increasing Dai Savings Rate to 3.33%
In the near future, the community will vote on a proposal from MakerDAO, an Ethereum-based decentralized finance (DeFi) platform, to increase the Dai (DAI) stablecoin’s savings rate (DSR) to 3.33%. If enacted, the shift will likely have far-reaching effects on prices throughout the whole DeFi sector.
On May 26th, the MakerDAO team tweeted about a new update, saying that depending on the results of a vote, DSR might increase from 1% to 3.33%.
Users may store their DAI at a predetermined rate of interest thanks to the Dai Savings Rate (DSR), which is an essential feature of the Maker Protocol ecosystem. According to Maker, interest is “real-time accrued,” or computed as the system makes money.
Potential Impact on DeFi Sector and Dai Economy
The proposal came from Block Analitica, a risk management firm specializing in DeFi. And was presented by a team member from MakerDAO’s risk core section. Block Analitica’s creator, Primoz Kordez, provided more background on the plan by warning of an impending pricing increase in DeFi.
According to MakerDAO, this is a global parameter that must be modified often. In order to accommodate transient changes in the Dai economy’s market circumstances.
MakerDAO offers a deposit smart contract, or DSR, via which users may earn the DSR on their DAI deposits. To help fund the DSR when users borrow DAI against collateralized assets like Ether and Wrapped Bitcoin (WBTC), this proposal also attempts to modify some stability fees on specified collateral types.
An August 2018 article on the MakerDAO blog describes the DSR as a “major monetary lever.” That facilitates “balance supply and demand of DAI” by incentivizing or discouraging users to lock up DAI in DSR contracts.
The rate was increased to 1% in December 2022 after a popular vote in support of the hike. In February, MakerDAO said that due to the update, 35 million DAI had been deposited into DSR contracts.