4% Increase: MakerDAO Vote Will Raise DAI Stablecoin Annual Stabiility Fee To 7.5%

In the latest cryptocurrency news, we have the users of the Decentralized Autonomous Organization (DAO) MakerDAO (MKR) which recently called in and voted to raise the so-called stability fee for Maker’s DAI (DAI) altcoin and stablecoin by an astounding 4 percent, according to the results of a recent poll that was completed on March 21st.

The “Analysis” part of the post notes:

“In February, the Stability Fee was increased twice, each time by 0.5%. The impact of this combined 1% increase was negligible, indicating that neither the target Stability Fee nor the incremental change was appropriate.

Based on last week’s governance call, the MakerDAO community is moving forward with a Governance Poll to gauge sentiment for an additional Stability Fee increase. “

As the firm announced, users had voted ‘Yes’ on the proposal which asks them to increase the stability fee by 4% – from 3.5% to 7.5%. When it comes to the actual reasons for this increase, the main ones as seen in the post are that the DAI exchange persists under one dollar, that there are high inventory levels among market makers and prop desk, as well as insufficient impact from the previous fee increase.

With this, the MKR token holder could choose whether to raise the fee by zero, two or four percent accordingly. Still, what we can see in the vote page is an explanation on “the absence of any significant volume clearing near $1 indicates that there needs to be stronger incentives in place” than just a 2% increase.

The post also admits that a 4% increase is “the largest one-time raise” which runs the risk of overshooting the estimate. The correct Stability Fee, hence, could still be 7.5% or higher. The MakerDAO token MKR is currently ranking as the 16th largest cryptocurrency with a solid increase of 1.12% at press time.

As the post concludes in the last “Next Steps” section:

“On Friday, March 22nd there will be an Executive Vote asking MKR token holders if they support or reject the change proposed by this Governance Poll. If the results of that Executive Vote is insufficient to manage inventory levels as measured over the following 5 days, another proposal will be put forth for a subsequent increase.”

MKR token holders already voted to raise the DAI stability fee to 3.5% this month.

In other news, one senior advisor for digital assets at the United States Securities and Exchanges Commission Valerie Szczepanik said that stablecoins could experience a lot of issues under current securities laws.