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On Friday, May 26th, Block Analytica put forth a proposal on Maker DAO to increase the DSR—the DAI Savings Rate—to 3.3%. If accepted, the proposal would constitute a significant increase from the current rate of just under 1%.
Maker DAO Debates Proposal to Increase DAI Interest to 3.3%
This Friday, Block Analytica, a core developer team, created a proposal to increase Maker DAO’s DSR to 3.3%. If the proposal passes a vote, it would mark a significant increase from the current rate of just under 1%.
Brace yourself, DAI holders, for a DSR at 3.33%.
— Maker (@MakerDAO) May 26, 2023
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 initial reaction, according to the discussion on MakerDAO, has been mostly negative with the users’ calling the proposal “poor”. One community member even stated that if it passes, they “will find a DeFi borrowing alternative.”
Maker DAO describes the DSR as a “fundamental component within the Maker Protocol system”. Additionally, it states that the interest is accumulated in real-time from the system’s revenue.
Maker DAO’s Recent Votes
In recent months, Maker DAO has been going through a series of changes to its operations including moving certain parts of its DAI Peg Stability Module (PSM) to Coinbase’s custody and launching a lending protocol specifically designed for its stablecoin.
On May 8th, Maker introduced the Spark lending protocol stating that its primary goal is to offer enhanced liquidity, as well as the lending ability to DAI stablecoin. Spark also has a direct line to the Direct Deposit Dai Module giving it a “direct wholesale credit line”. It is also connected to the DAO’s PSM.
In the second half of 2022, Maker also voted to move about 33% of its $1.6 billion PSM to Coinbase’s custody. The proposal was aimed at taking advantage of the exchange’s 1.5% reward program and further fostering the long-standing relationship between the two entities.