MakerDao, a Decentralized Autonomous Organization (DAO), behind the popular stablecoin—DAI, based on the Ethereum (ETH) blockchain, recently conducted a voting exercise involving its users. The purpose of the voting is to raise the stability fee for Maker’s Dai (DAI) stablecoin to 3.5 percent. The result of the recently concluded poll made it clear that many of its users think that the coin’s stability fee should be increased.
MakerDao Increases DAI Stability Fee to 3.5. Percent
MakerDao has since then followed up with an announcement which made it clear that the current stability fee rate has been increased from 1.5 percent to 3.5 percent. It is an increase of about 2 percent. In the announcement, the organization made sure to mention the key reason behind the newly proposed and voted stability fees. It was noted that the stablecoin one dollar to DAI peg had been slipping that has resulted in the price of the coin trading below the price mark on exchanges.
The stablecoin which is partly used for loans through a Maker-managed structure collateralized debt position (CDP), is based on the Etherum blockchain, (ERC-20) and it is also designed to copy the movements of the U.S. dollar and maintain 1:1 peg with the state currency. In the newly released announcement, MakerDao stated that “incentivizing CDP closures through a Stability Fee increase (thereby reducing outstanding Dai) is strongly viewed as the appropriate action.”
The Third Time in 2019 Alone
It is important to note that this is not the first time the stability fee of the coin will be increased this year by the organization. In February, 2019, the stability fee was already increased twice, each time by 0.5 percent. The organization has also made it known that this new fee percentage is almost negligible and wouldn’t affect users of the coin that much.