The MakerDAO protocol, a decentralized finance (DeFi) platform based on Ethereum, is set to vote on a proposal which aims to increase the Dai stablecoin’s savings rate (DSR) to 3.33%. This move could have significant implications for DeFi rates. Maker has stated that “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.” The proposal was submitted by the Block Analitica’s risk core unit team. The interest rate that users accrue from locking their DAI into MakerDAO’s DSR smart contracts is funded from the stability fees. A MakerDAO blog post from August 2018 reveals that the DSR is a key monetary lever that balances supply and demand of DAI by incentivizing or disincentivizing users to lock up DAI in DSR contracts. Before this latest proposal, the rate was increased to 1% in December 2022. According to MakerDAO, this decision led to more than 35 million DAI being deposited in a month.
About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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