Clear Majority in Fifth MakerDAO Vote Looks Set to Pass Another Increase in DAI Stability Fee
Users of MakerDAO (MKR) look set to raise the stability fee for the DAI stablecoin by 4%.
An ongoing governance poll, due to close within 8 hours today, April 11 (5 PM UTC), indicates that 50,579.23 MKR have been staked in favor of raising the stability fee by 4%, bringing it to 11.5% per year.
Other options on the poll included votes in favor of an increase of 1, 2 and 3% — or else not to raise the current fee at all. The second-largest majority, with 1,165.47 MKR staked to press time, has chosen a 2% increase — while the least popular option is for a 1% raise, with just 1.00 MKR staked so far.
278.52 MKR have been staked to press time in favor of not raising the fee and keeping it at its current 7.5% per year level.
A statement accompanying the governance poll — which opened on April 8 at 5 PM UTC — outlines that the need to increase the stability fee is driven by the fact that the DAI stablecoin is persistently failing to keep its 1:1 USD peg.
As previously reported, DAI is an ERC-20-based stablecoin ostensibly designed to maintain a 1:1 USD peg via the issuance of Maker-administered collateralized debt positions.
The two other factors proposed in the statement are identical to the rationale that was given in the preceding (fourth) stability fee increase governance poll: high inventory levels among market makers and prop desks, and insufficient impact from the preceding fee increase. As the statement outlines:
“In February, the Stability Fee was increased twice, each time by 0.5%. In March, the Fee was raised by an additional 2%, and then by 4% two weeks later. The impact of these combined increases was negligible, indicating that neither the target Stability Fee nor the incremental changes were appropriate.”
During a MakerDAO community call on April 9, head of community development Richard Brown said he was reasonably sure such increase votes would repeat until the DAI recovers its peg:
“Tensions are high and this is an important subject. Arguably [...] literally the most important thing we do at MakerDAO is the stability of the peg. Everything else flows from that.”
As reported yesterday, blockchain-powered event betting platform Augur has just launched a token denominated in DAI as part of a major upgrade to its platform, saying it will make trading less volatile as compared with Ethereum (ETH).
The MakerDAO token MKR, which grants voting rights, is currently ranked the 19th largest cryptocurrency on CoinMarketCap and is down 4.5% on the day to press time.