May 27, 2023
MakerDAO to Vote on Raising Dai Savings Rate to 3.33%
The Ethereum-based decentralized finance (DeFi) protocol MakerDAO is set to vote on a proposal that could have far-reaching implications for the DeFi market. The proposal would increase the Dai (DAI) stablecoin’s savings rate (DSR) from 1% to 3.33%.
The news was announced in a tweet on May 26th from the Maker team. The tweet stated that the “upcoming Executive Vote will deploy a new DSR raise, from 1% to 3.33%, if approved.”
The proposed increase was put forward by DeFi-focused risk management firm Block Analitica and submitted by a member of MakerDAO’s risk core unit team.
The DSR is an interest rate paid to users who lock their DAI into MakerDAO’s DSR smart contracts. The rate is funded from the stability fees paid by users who borrow DAI against collateralized assets, such as Ether (ETH) and Wrapped Bitcoin (WBTC). Additionally, the proposal aims to adjust several stability fees on certain collateral types.
According to a blog post from MakerDAO, the DSR is an important tool to “balance supply and demand of DAI” by incentivizing or disincentivizing users to lock up DAI in DSR contracts.
Adding more context to the proposal, Block Analitica founder Primoz Kordez told the community to “prepare for [a] rate hike in DeFi.” Kordez believes that a “decent amount of capital should flow to DAI DSR to push supply rates to a range of 3.5%+.”
The last DSR increase was voted in favor of in December 2022, leading to 35 million DAI being deposited into DSR contracts in a month.
The DSR is a Maker Protocol module that can be plugged into any other DeFi tool, extending the baseline yield of DeFi to a broader group of users. This could prove to be an attractive option for those looking to promote their NFTs and other crypto assets, as it could provide a higher return on their investments.
With the DSR increase set to be voted on in the coming weeks, it remains to be seen how the DeFi market will be affected. It is possible that this could lead to a surge in demand for NFTs and other crypto assets. As such, it is important for those looking to promote their NFTs to keep an eye on the vote and the potential implications of the DSR increase.Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.