MakerDAO (MKR), a decentralized autonomous organization within the Ethereum blockchain, has approved a 4% increase to the stability fee of Maker’s stablecoin DAI.
On April 12, nearly 51,000 MKR users have cast their vote in a governance poll proposing to raise DAI’s stability fee by 4%. As per the results of the executive vote, the majority of MKR users has voted in favor of hike, bringing the stability fee to a total of 11.5% per annum.
Along with the recently closed governance poll, a statement has also been released explaining the impetus behind the move to increase the stability fee of DAI stablecoin which, as it stands, has continuously failed to maintain its 1:1 USD peg.
DAI is an ERC-20 stablecoin stabilized against the value of USD which is maintained through automatic pricing mechanisms built into smart contracts.
As further detailed in the statement, the move to increase DAI’s stability fee was also driven by the stablecoin’s high inventory levels among market makers and prop desks coupled with the preceding fee increase’s insignificant impact.
As outlined in the statement:
“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.”
As indicated by the head of community development Richard Brown during a previous MakerDAO community call held April 9, such executive votes would persist until DAI regains its 1:1 USD ratio, stressing that:
“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.”
Currently, the MakerDAO token MKR is ranked the 20th largest cryptocurrency, according to data indexed by CoinMarketCap.