MakerDAO raises fees to stabilize the DAI stablecoin.

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2024-03-19

Recently, MakerDAO has implemented temporary adjustments to its protocol in response to market fluctuations. These adjustments are primarily aimed at ensuring the stability of the DAI stablecoin while maintaining a strong relationship with the US dollar.

The fee for borrowing DAI against collateral has increased from 15% to 17.25%.

In the recent market volatility, MakerDAO has implemented a series of significant adjustments to address the ongoing challenges. One notable adjustment is the increase in the fee for borrowing DAI against collateral from 15% to 17.25%.

This proposed adjustment also underscores the significant decrease in DAI's supply from $5 billion to $4.4 billion within the past week. This decrease raises concerns about DAI's liquidity, particularly as users may choose to withdraw a portion of the $1.1 billion in assets managed by the protocol.

This situation has placed MakerDAO in a position where it must confront challenges related to liquidity and stability of the stablecoin. Therefore, the new adjustments primarily focus on Maker Vaults and various interest rates within the MakerDAO ecosystem, aiming to ensure stability and sustainability in the face of unpredictable market fluctuations.

The DAI savings rate has been raised to 15% to encourage holding DAI

In response to the market volatility, MakerDAO has implemented several significant adjustments aimed at maintaining the stability of the DAI stablecoin. The DAI savings rate has been increased to 15% to incentivize holding DAI, while the APY for borrowing DAI through the SparkLend platform has risen from 6.7% to 16%. These adjustments took effect on March 10th at 7:55 PM UTC and are considered temporary. However, the process to revert fees to their initial levels is not automated, requiring intervention and careful management from administrators. This demonstrates MakerDAO's flexibility and commitment to the stability of DAI amidst market fluctuations.

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