MakerDAO Proposes Increasing DAI Savings Rate To 3.33%

Key Points:

• The MakerDAO core development team proposed increasing DAI’s savings rate to 3.33%.
• If accepted, the proposal would constitute a significant increase from the current rate of just 0,6%.
• MakerDAO says increasing the Dai Savings Rate (DSR) by 1% last year pushed more than 35 million DAI into deposits in a month.

MakerDAO is making a proposal to increase the DAI Savings Rate (DSR) to 3.3%. If accepted, the proposal would constitute a significant increase from the current rate of just 0,6%.

A core MakerDAO development team has proposed increasing DAI’s savings rate to 3.33% amid soaring interest rates as the US Federal Reserve seeks to combat persistent inflation. The proposal still needs to go through a formal voting process before it can be passed.

The Dai savings rate, known as the DSR, can be adjusted regularly in response to short-term changes in Dai market conditions. In addition, it says that interest is accrued in real-time from the system’s revenue.

The proposal is currently receiving a lot of support from the community, as many believe the move will boost DAI traffic. One community member even stated that if it goes through, they “will find an alternative to DeFi borrowing”.

MakerDAO said in February that increasing DSR by 1% last year pushed more than 35 million DAI into deposits in a month. Meanwhile, the 3-month US Treasury bond yield is currently around 5.29%.

Earlier in April, the community was buzzing because the MKR collateralized platform to borrow stablecoin DAI was being discussed on Twitter, leading to mixed opinions. Marco Manoppo, a researcher at Digital Asset Research, said that this is an act of “playing with fire” despite the volatile examples in crypto history.

After the information was spread by the community, the majority reacted negatively to the new move from MakerDAO and said that the platform is taking a step backward when it does not learn anything from the past.

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