MakerDAO Ready to See a Rise in Fees Above 11% In Order to Stabilize the Stablecoin (DAI)
MakerDAO users will be approving a fee increase in the network that would increase the cost of the DAI stablecoin.
There have been five different options to MakerDAO token holders that suggest a range of possible increases to the so-call stability fee. One of the proposals aimed at increasing 4% of the fees.
MakerDAO To Increase Fees
With a stability fee of 11.5 percent, users will have to pay more for loans in which they use Ethereum (ETH) coins as collateral. In this way, the amount of DAI in the market will be reduced and it will increase the price of the stablecoin that is currently close to $0.96. The ideal value would be close to $1.
During a public call on Thursday, MakerDAO Foundation risk management lead, Cyrus Younessi, commented:
“The DAI peg has continued to be weak this past week, pretty much as weak as it has ever been, hovering around 96 cents. DAI supply started to trend back up as the ETH price continued to go upward. There is lots of borrowing and lots of weakness in the DAI price.”
In the past, there have been smaller fee increases that were not enough to help stabilize DAI’s price. Apparently, there are users that believe that it would be better to search for another solution to stabilize the price of the digital asset.
According to Ryan Sean Adams, the founder of the crypto asset investment company MythosCapital, it may make sense to rely on the 100 million supply cap and restore the price of the virtual currency.
Another possibility proposed is to use a multi-collateral DAI. A user could not only use Ether but also other digital currencies to take a loan. Nonetheless, Younessi believes that messing with the DAI ceiling to affect DAI’s price seems not to be the right approach.
At the time of writing this article, DAI is the 66th largest digital asset in the market with a valuation of $40 million. Each DAI can be purchased for $0.981.