- MakerDAO voted in favor of the proposal to hike the DAI reward rate from 0.01% to 1%.
- 72% favorited an increase to 1%, 17% voted for 0.5%, and about 12% chose to leave the rate unchanged.
- It’s unknown when the new changes will be implemented.
MakerDAO (MKR), the governing body behind the decentralized lending platform Maker, has voted in favor of a proposal to increase its flagship stablecoin DAI rewards from 0.01% to 1%.
The voting on the proposal ended on Thursday. Almost 72% favorited an increase to 1%, while some 17% voted for 0.5%. Around 12% said they wanted to leave the reward unchanged at 0.01%.
MakerDAO’s decision to increase the DAI rewards rate, known as DAI Savings Rate (DSR), comes amid plummeting yields across all decentralized finance platforms. For example, the second largest stablecoin USDC is also yielding around 1% but is issued by the centralized entity Circle. However, traditional assets like U.S. bonds are currently yielding over 4%.
MakerDAO has been recently looking for ways to generate more revenue from its $7.7 billion Peg Stability Module (PSM) reserve. In October, the DAO voted in favor of a proposal to invest $500 million in short-term US treasuries and corporate bonds. The investment, which is seen as a deviation from MakerDAO’s decentralized nature, is expected to yield around 4.5%-6% a year.
In November, MakerDAO also voted to move $1.6 billion of its reserve denominated in USDC to Coinbase (NASDAQ:COIN) Prime, Coinbase’s custody program that is expected to generate a 1.5% annual yield on MakerDAO’s deposit.
However, the DAO recently rejected crypto investment firm CoinShares’ proposal to invest up to $500 million in corporate debt securities and government-backed bonds with it. It’s unclear why exactly the DAO turned down the offer.
Maker is the largest decentralized finance platform in the market. It has $6.76 billion in total value locked, according to data from DefiLlama. Its flagship overcollateralized stablecoin DAI has a $5.2 billion market cap. The coin is backed by more than $7 billion worth of various assets in its reserves.
On the Flipside
- It’s unclear when the rewards rate will officially be updated.
Why You Should Care
Maker is the largest decentralized finance protocol. MakerDAO’s decision to hike the reward rate for DAI deposits is a sign that the community cares about the future of Maker and DAI adoption.
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