Maker Stablecoin DAI Stability Fee Continues To Increase, Inches Way Up Closer to 20% via Votes
The MakerDAO community has recently voted in order to increase the fees in the network once again and reach 19.5 percent.
DAI, the stablecoin pegged to the US dollar is trading below the $1 dollar value but it was able to recover its stability after several fee increases.
Dai Stability Fee Keeps Growing
In the last three months, the stability fee has increased over 33 times and it has now reached 19.5 percent. According to a recent Reddit post, the COO of the MakerDAO Foundation Steven Becker, explained that progress has been made using the stability fee to help DAI’s price reach its peg once again.
The stability fee in this network increases in order to make DAI loans more expensive. This would have an impact on the market supply of DAI and have an effect on the price of the stablecoin.
At the moment, MakerDAO was able to become the largest decentralized finance (DeFi) application in the crypto space. The project holds over $300 million worth of Ether (ETH). As reported by DeFi Pulse, the crypto lending app Compound is the second largest DeFi project.
At the same time, MakerDAO wants to keep growing in the future with the implementation of multi-collateral DAI. Currently, DAI is only backed by Ether but the intention is to have other digital assets supported.
The community has been discussing how to deal with DAI’s stability. Some users proposed to reduce the supply even further as an additional measure to the increase in the fees. These fee increases have played an important role in stabilizing the network once again.
Vishesh Choudhry, part of the MakerDAO Foundation Risk Team, commented:
“What we’ve really seen is that as we’ve increased the Stability Fee over the past few weeks, the DAI price has stabilized a bit. There has been a lot going on with [Ether] and with Tether (USDT) so as always take everything with a grain of salt but I think that’s a positive indicator that what we’re doing actually has an impact.”
Other members of the MakerDAO community and Foundation are currently analysing when it would be a good moment to stop increasing network fees to stabilize the price of DAI.