MakerDAO proposal seeks to hike DAI savings rate to 3.33%
The community of Ethereum-based decentralized finance (DeFi) protocol MakerDAO will soon vote on a proposal seeking to increase the Dai stablecoin (DAI) savings rate (DSR) to 3.33%. If it all goes through, the move is tipped to have broader implications for rates across DeFi.
In a May 26 tweet, the Maker team revealed that an “upcoming Executive Vote will deploy a new DSR raise, from 1% to 3.33%, if approved.”
“The Dai Savings Rate (DSR) is a fundamental component within the Maker Protocol system, offering users the opportunity to deposit DAI and receive a consistent interest rate. This interest is accrued in real-time, accumulating from the system's revenues,” Maker stated.
The proposal was put forward by DeFi-focused risk management firm Block Analitica, and submitted by a member of MakeDAO’s risk core unit team.
Brace yourself, DAI holders, for a DSR at 3.33%.An upcoming Executive Vote will deploy a new DSR raise, from 1% to 3.33%, if approved.This change was put forth by @BlockAnalitica and submitted via the latest Stability Scope Parameter Changes.→ https://t.co/loPFBtqjAq pic.twitter.com/zRlPQQj3ze
The DSR refers to the interest rate that users accrue from locking their DAI into MakerDAO’s DSR smart contracts.
The DSR is funded from the stability fees that users pay for borrowing DAI against collateralized assets such as Ether (ETH) and Wrapped BTC (WBTC), and this latest proposal is also seeking to adjust a number of stability fees on certain collateral types as well.
As per a MakerDAO blog post from August 2018, the DSR is a key monetary lever that helps “balance supply and demand of DAI” by incentivizing or disincentivizing users to lock up DAI in DSR contracts.
“It is a global parameter that needs to be adjusted
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