MakerDAO Community Seeking DSR Increase up to 1%

The MakerDAO community is voting whether to raise the DAI stablecoin’s annual reward by up to 1%. Through December 1st, community members can rank-choose vote on whether to increase the so-called DAI Savings Rate either to 1%, 0.75%, 0.5%, 0.25% or let it remain at its current 0.01% rate. The poll was started on Monday 28th November 2022 by MakerDAO and is live till 1st December.

By 29th November, there was unanimous support for increasing the rate to 1%. As additional ballots were to be casted, the numbers were likely to change and so they did. At the press time, out of total 40,833 casted votes, 27,689 votes which accounts about 67.81% are in favor of 1% DSR increase while 13,097 votes equivalent to 32.07% are supporting 0.5% DSR increase.

The voting is taking place since yields in decentralized finance (DeFi) have fallen and there is less demand for lending on cryptocurrencies. The Federal Reserve’s vigorous push to boost interest rates has also caused yields in traditional markets to rise sharply, which has accelerated the capital flight from DeFi.

By lending their holdings, owners in USDC, the second-largest stablecoin, might make a little bit more than 1% a year. Compared to buying U.S. Treasury bonds, which yield about 4% and are regarded as the safest investments, this annual rate is significantly lower.

Since Maker increased its earnings by using a portion of its $7.7 billion in reserves, the award might be increased. The plan includes working with institutional investors like Coinbase and investing in a variety of yield-generating techniques, including government bonds and other conventional assets.

Earlier this month, Derivaux stated in a forum debate that increasing the incentive will also make DAI more competitive in comparison to competing stablecoins.

In his proposal, Derivaux stated that such a move “might predict that such a change will motivate USDC holders to migrate to lend DAI instead.” However, MakerDAO would incur a considerable expense as a result.

MakerDAO Community Rejected CoinShares Proposal

TheCoinRepublic reported the community on MakerDAO’s voting platform rejected the anticipated CoinShares plan. The plan called for investing $100 million to $500 million in community money.

The company investing in digital assets would have invested in a portfolio made up of government-backed bonds and corporate debt securities. It was anticipated that this investment plan would produce yield.

A total of 78,533 votes were cast on the MakerDAO voting platform. A total of 56,740 MKR votes were cast in support of rejecting the plan out of this total, or around 72.43%. A little over 13% of votes were cast in favor of the plan, with almost the same amount abstaining.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing