Tech

Increase the DSR of DAI on MakerDAO

12/02/2022
Bitcoin Ethereum News

A few hours ago, MakerDAO, the decentralized autonomous organization behind DAI, announced the verdict on the increase of the DAI Savings Rate (DSR) to be 1%. Voters were asked to choose from four increase options: 1%, 0.75%, 0.5% or 0.25%. 

MakerDAO increases DAI savings rate by 1%

A vote was held today in the crypto community on MakerDAO’s new proposal to increase the DAI Savings Rate (DSR). From the options of increasing it by 1%, 0.75%, 0.5%, or 0.25%, voters overwhelmingly chose the 1% option. 

In a roundup of tweets, MakerDAO announces the verdict:

They continued: 

And concluded:

“The distribution of this DSR increase will be included in a future executive ballot, where Maker Governance participants can use their MKR to activate the aforementioned Maker Protocol change.”

In practice, the DAI Savings Rate (DSR), would be the interest rate that the protocol pays on DAI deposits. Until now, that rate has been 0.1%.

With this increase, there will be an opportunity to make DAI an even more competitive stablecoin, helping to mitigate the outflow of capital from cryptocurrencies to traditional financial markets. 

Ethereum: liquid options for staking increase thanks to the Merge

Apparently, DAI is not the only crypto to become more attractive in the market. Indeed, from some surveys it appears that Ethereum itself, the second largest crypto by market cap, is attracting new staking lovers by bringing more liquidity into Decentralized Finance (DeFi). 

The survey conducted by Nansen reveals how the Merge update that took Ethereum from being a Proof-of-Work (PoW) to Proof-of-stake (PoS), has increased the amount of ETH put into staking, surpassing other collateralized return services.

This is more than 15.4 million ETH that are locked into Ethereum’s staking contract, placing that total of ETH staked in the top six cryptocurrencies by market capitalization. 

“It is up in terms of ETH2 deposits alone, with a total of $15.4 million ETH deposited. 

Lido dominates in terms of contributions, but other platforms such as Kraken, Figment, Staked and Stakefish are also present.”

In general, Ethereum in its PoS version has turned its miners into validators, with the stipulation that they must deposit or stake 32 ETH to propose new blocks and generate the protocol’s rewards. 

Not only that, users who do not deposit the 32 ETH can still participate in pooled staking, also known as liquid staking. This allows users to withdraw staked ETH at any time.

At the time of writing, 5.7 million ETH (out of a total of 14.5 million ETH) are staked in staking pools such as those of Lido and Rocket Pool, accounting for more than 40% of the total ETH staked in the ecosystem.

“The need for regulation of stablecoin and DeFi”: word of Jerome Powell

While talking about stablecoins such as DAI and Ethereum staking and the increase of liquidity in DeFi, then it is also pertinent to assess their regulatory situation. 

 

And indeed, the US Fed, through its Chairman Jerome Powell, reportedly said in September that stablecoins and DeFi in particular need regulation. 

Specifically, Powell said that DeFi suffers from significant structural problems but that this situation would not persist indefinitely. Not only that, Powell also reportedly said that as DeFi expands and begins to touch more retail customers, appropriate regulation is due. 

For certain, following the collapse of FTX, the US centralized crypto-exchange, earlier this month, the Fed may have more to think about. 



Source: https://en.cryptonomist.ch/2022/12/02/makerdao-dai-savings-rate-increased-1/