The MakerDAO community is set to vote on a proposal that could potentially increase the savings rate of its Dai stablecoin to 3.33% as part of its Ethereum-based decentralized finance (DeFi) protocol. Should the move be successful, experts predict it would significantly impact interest rates throughout the DeFi market.
The Maker team has announced an upcoming Executive Vote that would result in a new DSR rise, as per their tweet on May 26. The proposed rise is from 1% to 3.33%, subject to approval.
In cryptocurrency, the Dai Savings Rate (DSR) is a fundamental component of the Maker Protocol system. This innovative feature allows users to deposit DAI and receive a reliable interest rate on their investments. According to Maker, the interest is accumulated in real-time from the system’s revenues.
In a recent development, a proposal has been submitted by a member of MakerDAO’s risk core unit team in collaboration with DeFi-focused risk management firm Block Analitica:
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
As this proposal strengthens MKR, many positive waves took place to gather the Maker community in one place. Block Analitica founder, Primoz Kordez, has made a statement to the community in a Twitter thread regarding a potential rate hike in DeFi:
Now you see how systemically important MakerDAO is.
— Primoz Kordez (@PrimozKordez) May 26, 2023
It has been reported that the community had voted in favor of a hike in the rate, which led to an increase to 1% in December 2022. However, with the latest DSR proposal, the situation has taken a new turn. In a February report, MakerDAO announced that a staggering 35 million DAI had been deposited into DSR contracts within a month, marking a significant move for the platform.
According to a blog post by MakerDAO in August 2018, the DSR is a crucial monetary tool that aids in “balancing the supply and demand of DAI” by providing incentives or disincentives to users to deposit DAI in DSR contracts.
