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 a large number of its users are of the opinion that the coin’s stability fee be increased.
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. This is an increase of about 2 percent. In the announcement made, the organisation made sure to note down 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. This 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.”
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 organisation. 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.
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